Industry Committee on Feb. 4th, 2021

[Bill Matthews]

Yes, I have, Madam Chair.

[John Nater, Conservative, Perth—Wellington, ON]

Thank you for that.

Could you let us know whether there is a specific clause within that contract that causes that entire contract to not be disclosed to parliamentarians? Could you give us some information on that clause?

[Bill Matthews]

The contracts themselves are confidential. That was across the board. This is an industry where they're very sensitive about protecting their IP, etc. You actually have to sign an NDA to even enter into negotiations with these companies. It is a very sensitive piece.

I think I have already answered that the Canadian contracts are confidential. As the procurement department, we take very seriously the government's obligations under contracts. We want to make sure we respect those.

[John Nater, Conservative, Perth—Wellington, ON]

Thank you for that.

I'm not a lawyer. I'm just a farm kid from Logan township. Would an order of this committee or an order of the House produce the contracts to be reviewed in camera? Would that trump those non-disclosures?

[Bill Matthews]

All I can say, Madam Chair, is that I take the obligations under the contract very seriously. Any potential breach of contract would not only potentially limit the ability to get vaccines, but would also compromise future negotiations, if we're viewed as a department that doesn't respect the contract clauses.

We therefore take our contracts very seriously at PSPC.

[John Nater, Conservative, Perth—Wellington, ON]

Thank you for that. I just find it interesting that AstraZeneca and the European Union have come to an agreement to disclose parts of that contract. The United States has disclosed parts of theirs. I find it interesting that our negotiations have not provided for at least some disclosure of those contracts.

I want to move on to the deadline that has been put out time and time again by the government that all Canadians who want a vaccine will receive one by September. Again, I've heard it said that the number of doses is being determined by quarter.

What reassurance can you provide to this committee that we aren't going to get the bulk of that allotment in late September for that third quarter, thereby making it impossible for provinces to actually get needles into people's arms before the end of September as has been promised?

[Bill Matthews]

Thank you, Madam Chair.

We have ongoing discussions with the suppliers about schedules. They start in earnest as regulatory approval gets closer. The notional quarterly allocations were set out in the summer, long before production was up and running.

We do have discussions with suppliers about the need for a steady, even flow of product for that very reason. We do want our provinces and territories to have time to ramp up. We are still in relatively early days. I think the first doses started arriving in the third week of December.

The plan is for those companies to ramp up production. As they do, Canada gets an increased allocation on an upward curve. That matches the ability of the provinces and territories to ramp up their delivery efforts right alongside the production ramp-up that companies are actually seeing.

[John Nater, Conservative, Perth—Wellington, ON]

We've often been told that we need to be receiving two million doses per week to meet that September deadline. At what point, in your estimation, will we get to the point where we'll be regularly receiving two million doses per week?

[Bill Matthews]

It's a ramp-up by quarter. I think we know what the allocation is for next week. It's still early days in terms of Pfizer and Moderna, but there is a fairly steep ramp-up. It's not a straight line.

The math that was done was simply dividing the number of weeks left by the number of doses. There is a fairly steep upward curve. As the provinces and territories become more familiar with what's required to administer this vaccine, their ramping up of the actual vaccine delivery is happening as well.

[John Nater, Conservative, Perth—Wellington, ON]

Could you at least give us an estimation of when you expect to hit that two-million dose mark? Are we talking about early April, early June or early July?

[Bill Matthews]

I think I can talk by quarter. The minister has already shared that in Q1 we're expecting six million doses in total of Pfizer and Moderna. You don't get there all at once, but there's a ramp-up to meet that need. Keep a close eye on it week to week, and you will see these things start to come up.

[John Nater, Conservative, Perth—Wellington, ON]

Thank you for that. I see that I'm out of time.

I would just note that there appears to be a significant risk that so many of these doses are weighted toward the end of the third quarter. We have a significant risk that these will not arrive in time for all Canadians to have a vaccine by the end of September.

Thank you, Madam Chair.

[Bill Matthews]

Madam Chair, if I could interject, the plan is that Q2 will be bigger than Q1. There's a steady ramp-up in Q2, and that's really where the vaccine effort gets quite intense.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

Our next round of questions will go to MP Lambropoulos.

You have the floor for five minutes.

[Emmanuella Lambropoulos, Liberal, Saint-Laurent, QC]

Thank you, Madam Chair. I'll be splitting my time with MP Ehsassi.

I rarely engage in partisan politics, but I don't like the opposition constantly saying that we will not be meeting our September targets, when it's clear in the contracts—and when people who have been negotiating these contracts are saying it—that we will be meeting it by the end of September. It instills fear in Canadians, and it uses fear in order to gain support from Canadians. I don't think that's the way we should go.

If you could send one message to Canadians about vaccines and whether or not Canada is on the right track to receive the amount they've said they're going to receive by September, and that we're going to have Canadians vaccinated by a certain date, what is that message?

[Bill Matthews]

Thanks, Madam Chair. I can only speak to it from a contractual perspective.

We have enough vaccines under contract for the two approved vaccines to get all Canadians vaccinated. We have delivery schedules that will get us there by the end of September. As more vaccines get approved—should they get approved—we have a chance to improve on that.

It is a steady ramp-up of deliveries. These are production lines that are still relatively new, so it makes perfect sense that early Q1 deliveries will be smaller than Q2's. This is a steady ramp-up, and there are enough vaccines under contract for already approved vaccines.

[Emmanuella Lambropoulos, Liberal, Saint-Laurent, QC]

Thank you.

[Ali Ehsassi, Liberal, Willowdale, ON]

Thank you to my colleague for sharing her time.

I'd like to go to Mr. Kennedy, if possible.

Mr. Kennedy, I found your testimony to be very, very helpful. Unfortunately, it appears, according to what some of the members are saying, that we're drawing parallels between the U.K. and Canada. You rightly pointed out that the retrofitting in the U.K. started in 2019, and you have been examining their approach to biomanufacturing.

Would you like to elaborate on that, so we all understand full well that the capacities in Canada and the U.K. were not the same?

[Simon Kennedy]

Madam Chair, we are working very diligently to support the government in rebuilding Canada's biomanufacturing capacity, but the main point, which I think is indisputable when looking at the facts, is that we're unfortunately starting from a much lower base.

The U.K. is home to two of the world's largest pharmaceutical companies, which are both involved in the production of COVID vaccines: GSK and AstraZeneca. They had, going back many years, even earlier than 2017, a fairly sophisticated strategy for life sciences that involved investments in the sector. I believe it was in 2017—I'd have to triple-check—that they launched discussions about further reinvestment in their industry.

This is something that the vaccine task force looked at in terms of whether there were lessons learned for the Canadian experience.

As an example, they are now in the process of constructing their vaccines manufacturing and innovation centre, which will be a large facility that will be partly dedicated to research and partly available for commercial vaccine production. As I said, the contracts for that were let in 2019, and it is not finished being built yet. My understanding, based on the analysis we've done, is that some of the equipment that their contract manufacturers are using to make COVID vaccines has been relocated from this facility under construction to the contract manufacturers.

The main point is that the U.K. started from a much higher base, has a larger contract manufacturing industry, had already been actively investing, studying and consulting, and had shovels in the ground to build further capacity. In fact, they were actually able to borrow some of the stuff that was already in flight when the pandemic hit, to pivot it. There's really no comparing the situation with Canada.

With regard to Sir John Bell's comments that all things being equal, it would be better to build stuff domestically, we share that sentiment 100%. Obviously, for the future, and for next year and beyond, the objective would be to be in exactly that position. If you cast back nine or 10 months ago, there was.... The conclusion of our leading experts, and from the analysis we did, was that the notion that we build a brand new factory from the ground up, have it licensed, do the tech transfer and commence vaccine deliveries would have been a risky proposition, to say the least.

I think there are lessons to be learned, but we are in a very different position from the United Kingdom. I can assure you of that.

[Ali Ehsassi, Liberal, Willowdale, ON]

Thank you for that.

[The Chair, Liberal, Sherry Romanado]

We will now go to Mr. Lemire.

The floor is yours for two and a half minutes.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Thank you, Madam Chair.

I also thank the witnesses.

Mr. Matthews may be able to answer my question, but it is intended for all the witnesses.

Is Canada prepared for a mutation of the virus? If so, will the contracts be sustainable? Will it be possible to adapt them? Should the virus mutate, could the Canadian strategy really enable us to be resilient and achieve the objective of vaccinating everyone by September?

[Simon Kennedy]

I can provide an answer, and Mr. Matthews could add to it.

This is actually one of the reasons we have engaged in a discussion with Novavax to localize production. This does not concern only the existing vaccine. It's also in case we need an additional booster dose or new versions of the vaccine. The purpose of the ongoing work and other investments in Canadian options, such as Medicago, is to prepare us for potentially needing new versions of the vaccine.

This is certainly a priority for us in terms of biomanufacturing.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Thank you.

Mr. Matthews, do you want to add anything?

[Bill Matthews]

Madam Chair, the only thing I would add is that it's a really important question, and it's a question probably better posed to the health experts or the vaccine manufacturers. They are certainly actively watching the various variants that have emerged and are wanting to understand how their vaccines hold up against those variants.

It's too early to say, as far as I know, but that's a better question for the health folks.