Thank you, Mr. Chair.
Happy new year, everyone. It's good to see you all. I too intended to be there in person, but I had the same flight issues as Mr. Ellis.
I would like to begin with this, particularly for those who aren't following and are maybe not as familiar with the issue as members around the table are. In November 2020, the Liberal government of Canada signed, within five days, two contracts with a firm called Medicago, based in Quebec City. It was majority-owned by Mitsubishi Chemical, the largest company in Japan and the 43rd-largest company in the world, with minority owners Philip Morris, the tobacco giant. They signed two contracts from two different government departments.
The first contract was a contract from the industry department, known as ISED. Their minister, Minister Champagne, has the title of Minister of Innovation, Science and Industry. They signed a contract to develop a non-mRNA COVID vaccine. Part of that contract was also a contract to provide capital upgrades to the plants. Primarily, the money was to develop a vaccine that was not yet developed or invented. That contract at the time was worth more than $220 million.
Five days later, the Liberal government of Canada signed another contract with Medicago to purchase the vaccine that had not yet been invented. That vaccine contract stated that the initial batch would be for 20 million doses, at a cost of approximately $30 a dose or $600 million, if the vaccine were invented and managed to get through all the approval processes.
Medicago did invent such a vaccine, made from a derivation of the tobacco plant. It received Health Canada approval in February 2022. By this time, the Government of Canada had purchased several hundred million doses already of alternative vaccines from other global providers. Shortly after that, in December 2023, Mitsubishi bought the entire company. About six weeks later, they shut Medicago down, putting more than 400 people in Quebec City out of work.
The president of Medicago appeared before this committee at the time and said, under questioning, that Medicago owned all the intellectual property that was paid for by the taxpayer to invent this vaccine. They were in “negotiations”, they said, as did Minister Champagne, when questioned about who owned the intellectual property that taxpayers had paid for and that the government had never received a vial of. While they contracted for 20 million doses, by the time it got Health Canada approval the government no longer, according to the Minister of Health's testimony before this committee before Christmas, needed that vaccine.
We have a situation here that may be confusing to people. Just shortly after the Minister of Health appeared before this committee, the government made an announcement, on December 8, on a settlement with Medicago. The settlement was that Medicago would pay back $40 million of the $220-million contract signed with the Minister of Industry.
That contract actually ended up being $173 million, I think, spent out of the $223 million. They were paying back $40 million of that. The minister's press release says that was mainly to deal with the capital investments to renovate the facility in Quebec City. It wasn't about a payment supposedly to get back the intellectual property. They also announced in that, though, that Medicago was being generous. They were going to give the plant to a group of local managers, along with the vaccine intellectual property that Canadian taxpayers had paid for.
They were generous in saying that Canadian taxpayers paid for the development of that vaccine, so they were going to give it, for one dollar, to Aramis, a new company that would take over the assets of the plant and the intellectual property, made up principally of former employees of Medicago in Quebec City.
The big kicker in that announcement was that, in addition to all of that, the government was going to pay Mitsubishi Chemical, the largest company in Japan, $150 million. The questions at the time were what that $150 million was for, and whether it was a penalty because we didn't buy the actual 20 million doses of the vaccine.
Officials from the health department—Ms. Jeffrey and Minister Holland—when they were before the committee, called this $150 million an “advance payment” out of the vaccine purchase contract. That's the term they used. In fact, the president of Medicago, who was before this committee shortly after that—I think it was the week after that—used the exact same term: $150 million for an advance payment. The money is gone. It's a sunk cost. It was an advance payment for the purchase of the 20 million doses of the vaccine of which the government never received a single vial.
This contract—a public, redacted contract—was released to the public accounts committee. I've gone through that contract. The term “advance payment” is nowhere in that contract. There is no clause in that contract for an advance payment. What it does say, in the redacted version in article 8, is that payment will be made in accordance with the basis of the payment schedule in annex B.
When you go to annex B—it's an interesting annex to read—it says that payment gets received only when the delivery, and there's a delivery schedule, of the vaccine is actually in the hands of the Government of Canada. Then the cheque gets cashed. There is no discussion in this contract and no commitment for an advance payment—nothing.
Do you know what the kicker of that annex B is? It's article 4 of annex B, which is the right to reduce the quantities. It says that the Government of Canada, under 4(a), may give written notice to the contractor to reduce the number of doses ordered by Canada. Clearly, the Government of Canada went from 20 million to zero. Under 4(b) of that annex, the contract says that if Canada gives notice pursuant to (a) above, the contractor will have no claim for further payment—no claim.
We had the Minister of Health and officials, and we had the president of Medicago appear before this committee, saying that the $150 million was a payment for a clause that does not exist. In fact, in the contract, it contradicts that and says that the Government of Canada owes no money if it reduces the payment.
What is the payment for? It's either, as the minister said in committee.... He never read the contract before he paid the $150 million. He said, in response to my question, that he hadn't read the contract when he signed off on sending the largest company in Japan $150 million. If it's not that—because he didn't read the contract and he swore it was an advance payment that was in here, and the president of the company said it was an advance payment—they both misled this committee. They misled a committee of Parliament.
Dr. Ellis's motion says that there is such contradiction here that we need to do a study and get to the bottom of this. We need the Minister of Industry to come to this committee and explain why he either paid out over $173 million of taxpayer money to develop a vaccine that he didn't own and didn't put in the contract provisions, or have the smarts to put in the contract, that he owned. He also then may have been involved in a discussion—because he said publicly that he was in a discussion—with the company on the terms of repayment of this and the intellectual property. They came, clearly, to another deal that said that the government was going to give the company $150 million of taxpayer money on a clause that doesn't exist in the purchase agreement.
We need to see the contracts from the strategic innovation fund that the Department of Industry signed and the contract to develop this vaccine. We need to see whether or not there is an advance payment in there. Obviously, there is no advance payment for a vaccine that didn't exist.
We need to recall the Minister of Health and the president of Medicago to explain why they claimed there was a clause in this contract for the purchase of a vaccine that does not exist, and why they didn't abide by the contract, which says the Government of Canada doesn't owe any money if no vaccines are ordered and we reduce the quantity.
What is it? It looks to me like the Government of Canada is one of two things. Either it's totally incompetent because no one ever read the contract and they just accepted it and wrote the cheques, or it actually paid for the intellectual property twice. It paid $173 million to Mitsubishi to develop this vaccine and now it's paying another $150 million for, apparently, technology we already own.
What's the basis for that $150 million?
The only way we're going to get to the bottom of it is if the contracts under the SIF program that were signed by the industry minister are made public, if the unredacted version of this contract is made public and if the contracts signed between Medicago, Mitsubishi, Aramis and the Government of Canada in this December 2023 deal, which paid the $150 million, are made public. We can then find out why taxpayers have paid over $300 million for a vaccine that never produced a single, commercial vial for taxpayers in Canada.
This is a massive scandal. I don't believe it's a political scandal in the sense that I.... There may be Liberals involved, but to me, it looks like a massive incompetence scandal on the part of these Liberals, yet again, who don't read the contracts they sign and don't read the payments of cheques of taxpayer money that they send to large, global companies.
This is outrageous to me. If this committee does not have a vote for the motion that's here, it's voting for a cover-up. It's voting to cover up the Liberal incompetence on pissing away $300 million of taxpayer money when there was no contractual requirement to do so. It's incompetence, stupidity and government waste.
What's the reason? What's the reason that ministers came before this committee and claimed they were compelled to give that $150-million payment for a contract, a clause and a term that do not exist? Either they were intentionally misleading this committee, or it was sheer incompetence.
I can't believe that people would be so dumb as to give out $150 million to the largest company in Japan without reading the contract and without verifying in the contract that it requires them to do so—which it does not.
I call on members to vote for MP Ellis's motion so that this committee can get to the bottom of this $300-million scandal of this Liberal government.
Thank you.