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COVID-19 procurement: Standing Committee on Health—April 15, 2020

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Supplying the Canadian response to COVID-19

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Needs and the challenges to meet those needs

Given the high global demand for COVID-19 related goods, there is a possibility that not all contracts will be entirely fulfilled. This has been considered in the procurement approach, and we are actively engaged in identifying and strengthening a domestic supply for critical supplies, services and equipment.

As the COVID-19 crisis has evolved rapidly, with increasing border restrictions and less commercial air carrier options for Canadian travellers, we are changing our approach to securing transportation for stranded Canadians abroad by leveraging domestic air carriers, who now have excess capacity.

Countries have also begun implementing export restrictions on the goods critical to combatting COVID-19, such as personnel protection equipment (PPE). This is why we are working closely with Innovation, Science and Economic Development Canada (ISED) to identify and strengthen domestic manufacturing capacity.

Negotiating contracts has also evolved rapidly, with a number of terms being requested by suppliers that do not come up in the normal course of business including: [Redacted]. Public Services and Procurement Canada (PSPC) has been working closely with central agencies and the Department of Justice to ensure that risk is appropriately identified and managed for the Government of Canada so that front line workers get the equipment they need.

Public Services and Procurement Canada actions taken to equip essential service workers with the supplies and equipment they need to combat COVID-19

The Government of Canada is collaborating with provinces and territories on an ongoing basis to identify their needs and purchase required equipment, supplies, and services to combat COVID-19.

As the Government of Canada’s central purchaser, PSPC is spearheading the consolidated purchase of emergency supplies and services required for Canada, including at the federal, provincial and territorial levels.

We are awarding contracts in order to ensure we are acquiring the goods and services that front line workers need including personnel protection equipment, medical equipment, nursing and support services, air charters, accommodations, transportation, and security.

Public Services and Procurement Canada has stood-up a dedicated team of procurement specialists who are implementing flexible procurement approaches to best meet Canada’s needs.

In addition to leveraging existing sources of supply, we are proactively engaging industry to help meet Canada’s needs and ensure suppliers globally have a clear pathway through our BuyandSell website to connect with the Government of Canada if they are able to supply goods and services that may be of use.

The call to suppliers was posted to the Government of Canada’s BuyandSell webpage on March 12. As of April 11, we had received almost 24,000 responses to the call-out.

By working directly with both new and existing suppliers and manufacturers, mobilizing Canadian industry and ensuring that suppliers have a clear pathway to supply goods and services that may be of use in response to COVID-19, we have placed orders and received millions of PPE supplies including masks, gloves and gowns. PSPC also continues to work with all available suppliers who have the capacity to respond to Canada’s needs.

Public Services and Procurement Canada is negotiating contracts with manufacturers who have stepped up with offers to retool their facilities to meet Canada’s needs. To date, we’ve established 14 contracts with Canadian manufacturers and negotiations are underway with others.

Public Services and Procurement Canada has also put in place contracts with air charters on behalf of Global Affairs Canada to transport Canadian citizens from around the world. Given that domestic airlines now have capacity, we are negotiating with them to repatriate Canadian nationals and/or family members and permanent residents.

Roles and responsibilities of other federal departments and agencies

The Government of Canada is leading a coordinated approach to provide needed supplies and equipment across the country. This involves PSPC, the Public Health Agency of Canada, Health Canada, ISED, the National Research Council of Canada, and Public Safety Canada.

Public Services and Procurement Canada

Public Health Agency of Canada

Health Canada

Innovation, Science and Economic Development Canada

ISED is leading Canada’s Plan to Mobilize Industry to Fight COVID-19 Plan to Mobilize Industry to fight COVID-19 for manufacturers and business

National Research Council of Canada

The National Research Council's Industrial Research Assistance Program will build on its existing relationships with thousands of Canada's most innovative small and medium-sized businesses to pose challenges to the marketplace for innovative solutions to fight COVID-19

Public Safety Canada

Lead federal department with respect to the co-ordination of all government efforts with respect to addressing an emergency. It has a Government Operations Committee that all other federal department and agencies feed into, as well as a federal/provincial/territorial committee to co-ordinate/manage efforts with the provinces and territories

Future considerations

Given what we have learned to date, our procurement approach has evolved with respect to responding to the COVID-19 pandemic, and will bring important lessons learned for future emergency planning including:

All of these activities are key, to making sure that Canada stands ready.

Partnerships

In this section

Canadian Embassy in China

With the global market being challenged by the overwhelming need for medical supplies, Public Services and Procurement Canada (PSPC) has been working closely with Global Affairs Canada (GAC) in Ottawa and the Canadian Embassy in Beijing and the Canadian consulates in Shanghai and Guangzhou to help navigate and expedite the rapidly changing environment in China when it comes to the supply of personal protection equipment (PPE) such as masks, gowns, swabs, test kits, and other products needed in Canada in support of the COVID-19 pandemic.

To support these efforts, Canada has engaged a broker and various experts to help officials navigate what had suddenly become the world's most competitive industry. They are assisting Canada to identify source of supplies that will meet Canadian standards, secure the supply chain and to help through the export process.

Through 2 morning and evening teleconferences, we are taking stock of the status of planned shipments to the warehouse at the airport to assist with the planning of flights from Shanghai to Canada, identify issues and find solutions or mitigations. This provides 24/7 coverage.

Amazon

On April 1, 2020, Public Services and Procurement Canada, on behalf of the Public Health Agency of Canada (PHAC), signed a $5 million contract with Amazon to efficiently get health care professionals the personal protective equipment and supplies they need to protect themselves and continue caring for Canadians during the COVID-19 pandemic.

The agreement with Amazon is mostly to have access to its technology interface where the supplies will be catalogued and registered to allow provincial and territorial health authorities to order them directly through the Amazon business store.

The delivery of the personal protective equipment and supplies ordered and approved by the PHAC will be done by Purolator when for large shipments on pallets and by Canada Post when for smaller shipments such as a box. The personal protective equipment and supplies will be warehoused at the facility of Maritime Ontario in Brampton, where the technology of Amazon has been installed to treat the orders of provincial and territorial health authorities. Maritime Ontario is an on-going key sub-contractor of Canada Post.

Amazon is offering their assistance to Canada for no profit until June 30th, 2020. Fees beyond June 30th will be less than Amazon’s standard commercial fees, and determined before May 30. The bulk of the $5M is to pay Purolator or Canada Post for transportation charges.

Bolloré Logistics

At the end of March, PSPC entered into a contract with Bolloré Logistics Canada Inc using established emergency contracting authorities to provide urgent logistics and transportation services related to the procurement of personal protective equipment and medical supplies from China. This equipment is urgently required in Canada to address significant shortages that threaten our front-line health care workers.

Bolloré Logistics Canada Inc is on a standing offer with the Government of Canada for freight and cargo services and was selected due to its previous experience providing brokerage services to Canada and its significant footprint in China. The decision was based on minimizing risks and on the urgency of the requirement.

We are considering adding additional service providers, including other logistics firms and additional airlines for cargo services. For example, over the weekend, we have had cargo shipped from Shanghai with Air Canada and Cargojet. Given the urgency of delivering products to Canada and the challenging procurement circumstances in China, we are proceeding cautiously to avoid inserting additional complexity into the process keeping in mind that our immediate priorities are expediency and minimizing risks.

Airlift from China

We have had 6 flights so far from Shanghai to Canada and we have entered into contractual arrangements with Cargojet and Air Canada to provide sufficient capacity going forward. The first 2 flights organized as part of this effort arrived in Toronto on April 1 and April 6, delivering a resupply of personal protective equipment. The April 6 flight arrived with about 8 million surgical masks ordered by the federal government, and other orders made directly by the governments of Nova Scotia and Quebec. When Cargojet flight 1392 touched down in Hamilton on April 11 and our follow-on 3 Air Canada flights on April 12 and 13, they it brought in large quantities of badly needed N95 respirator masks to help in the fight against COVID-19.

More flights are being arranged on a regular basis.

On April 11, Air Canada publicly announced that it was boosting its cargo capacity by stripping the seats out of 3 of its enormous Boeing 777 aircraft to double their cargo capacity. "Bringing critical medical and other vital supplies rapidly to Canada and helping distribute them across the country is imperative to combating the COVID-19 crisis," Tim Strauss, vice-president of cargo at Air Canada, said in a statement.

Domestic capacity

The government is also leveraging Canadian innovation and ingenuity by investing directly in our businesses. Innovation, Science and Economic Development Canada (ISED) is leading through the Plan to Mobilize Industry to Fight COVID-19 Plan to Mobilize Industry to fight COVID-19, introducing new measures to directly support businesses to rapidly scale up production or retool their manufacturing lines to develop products made in Canada that will help in the fight against COVID-19.

To date, Public Services and Procurement Canada (PSPC) has placed orders for millions of key items, such as masks, tests, ventilators, and we have established agreements with Canadian companies that are stepping up to support Canada’s efforts to combat COVID-19:

Canadian entrepreneurs: Pivoting to personal protection equipment production, success stories

Canada Goose

Canada Goose has announced its plans to ramp up domestic production of personal protective equipment (PPE) for frontline healthcare workers across Canada. Over the next 2 weeks, the company will begin to reopen all of its 8 Canadian facilities and, at full capacity as many as 900 employees will be working to support the efforts. With new contracts in place, Canada Goose will produce at least 60,000 gowns per week, with plans to deliver up to 1.5 million, at cost. Any unintentional profits, potentially derived from efficiencies, will be donated to national COVID-19 relief funds.

This announcement builds on its commitment to manufacture and donate 14,000 units of gowns and scrubs at no charge. Produced in 2 of its Toronto and Winnipeg facilities, product shipments to hospitals and healthcare facilities across Canada, began this week.

Molded Precision Components

Molded Precision Components (MPC) is shifting its plastic-injection moulding company’s output from making auto parts to producing components of medical face shields. MPC, a 60-person firm in Oro-Medonte Township, just north of Toronto, normally makes car housings, seals or cable fittings.

The company’s in-house engineers and tool designers have turned their attention to medical protective gear. Working with a firefighter, a paramedic and a local physician who serves high-risk patients, MPC designed a headset component for medical face shields.

Stanfield’s Ltd.

A historic Canadian undergarment factory famed for long johns and boxer shorts is about to rapidly reinvent itself as a domestic producer of medical gowns.

Jon Stanfield, the chief executive of the fifth-generation family firm, said in an interview he’s already sourced approved fabric from nearby Intertape Polymer, and is ready to be producing medical clothing within days. Stanfield said the firm has patterns and machinery that would initially produce more than 2,000 gowns daily per shift to help feed a Canadian demand for garments that emerged after the pandemic sliced supply from China.

In the 1890s, the company invented shrink-proof heavy woolen underwear used by workers during the Klondike gold rush; in the First World War, the factory was converted to provide wool blankets to keep soldiers warm in the trenches; and in Second World War, it supplied base layers of underclothing.

Donations: How they are being used

Public Health Agency of Canada (PHAC) has launched an initiative and is leading the co-ordination of donations of medical supplies and equipment in partnership with a number of key partners including Amazon, Canada Post, and the Canadian Armed Forces.

Individuals, businesses and other organizations can contact PHAC through the Donations to help combat COVID-19 website, which will then trigger a series of activities from their partners, depending on whether the donations are located domestically, or internationally. Once donations have been identified, they will be transported to Canada, sorted by the Canadian Red Cross, and then provided to provinces/territories for distribution.

Interested donors with sealed personal protective equipment (PPE) purchased in Canada should consider donating directly to their local hospital, healthcare authority, or other provider. If donors are unsure about the quality, or require assistance transporting/importing large orders, PHAC has established testing processes to ensure all PPE equipment meets Canadian standards.

Public Health Agency of Canada assesses all donations to ensure they meet Canadian standards. This assessment will also determine whether the products we receive are suitable for medical use or better suited for community use (such as in retirement homes, for critical infrastructure workers, or other locations where the likelihood of infection is lower)

As many of these products are labelled exclusively in foreign languages (for example Mandarin), PHAC will translate the labels into both official languages along with clear instructions to ensure that users are comfortable using these often unfamiliar products.

All donated PPE is allocated collaboratively with provinces and territories on a per-capita basis, though may be diverted to meet specific requests for assistance as needed. Each province has complete discretion over how to allocate PPE across their healthcare systems.

To date, PHAC has distributed millions of gloves, masks, and other PPE from generous donors such as 3M, Home Depot, Alibaba, Magna, General Motors, Toyota Manufacturing Canada, Ford, Linamar, Shell, Suncor and others. We expect this number to grow as Canadians and our friends answer the call on how you can make a difference.

Key legislation in an emergency and the differing roles

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Emergencies Act

Each province has its own legislation on emergencies, which usually specify the responsibility of each level of government (municipal, provincial and federal). At the federal level, the Emergencies Act sets out the roles of each federal department, to assure an effective response.

The Emergencies Act was passed by Parliament in 1988 and is a federal law that can be used in the event of a national emergency. It replaced the War Measures Act, which was repealed when the Emergencies Act become law in 1988. To date, the Emergencies Act has never been used.

There are 4 types of national emergencies: a public welfare emergency, a public order emergency, an international emergency and a war emergency. The federal government, under the leadership of the Department of Public Safety, can assist with any type of emergency.

In the context of the COVID-19 situation, the applicable emergency is that of public welfare dealing with threats to the life, health or safety of Canadians: “an urgent and critical situation of a temporary nature that seriously endangers the lives, health and safety of Canadians and is of such proportions or nature as to exceed the capacity or authority of a province to deal with it … and that cannot be effectively dealt with under any other law of Canada”.

Under the Emergencies Act, once the Government makes a formal declaration, the declaration is in place for a limited period of time, subject to oversight by Parliament. In the case of COVID-19, that time limit is 90 days, however Parliament can revoke it at any time, as can the government. Any extension of the declaration must be confirmed by Parliament.

In addition, the Canadian Charter of Rights and Freedoms applies during a declaration of an emergency, and continues to protect fundamental individual rights as the Government of Canada takes the necessary steps to safeguard the health and safety of Canadians.

Defence Production Act

With respect to the Defence Production Act (DPA), this only applies to the military defence of Canada—not to a pandemic. Unlike the Defense Production Act in the United States, our act does not provide powers over industry and sources of supply in times of national emergency.

The Minister of PSPC is responsible for the administration of the DPA and the exclusive authority to buy or otherwise acquire defence supplies and construct defence projects required by the Department of National Defence, subject to exceptions listed at subsection 10(2) of the DPA. All Public Works and Governments Services contracts for defence supplies or projects are governed by the provisions of the DPA.

The DPA includes the following 3 parts:

Under Part 1 of the DPA, Section 11 permits the minister, if authorized by the Governor in Council, to do or undertake, on behalf of an associated government, any act or thing that the minister is empowered to do or undertake under the act. Sections 12 to 15 deal with the minister's mandate to organize and control the Canadian defence industry. Section 16 provides wide powers to the minister with respect to the procurement, production or disposal of defence supplies or defence projects. Sections 21 to 25 deal with the administration of defence contracts including an ability to set price, and require audits.

Department of Public Works and Government Services Act

Sections 6 and 7 outline in detail the powers, duties and functions of the minister including the acquisition and provision of services for departments; planning and organizing of the provision of materiel and services required by departments; acquisition and provision of printing and publishing services for departments; and construction, maintenance and repair of public works, and federal real property. In addition, section 9 gives the minister the exclusive authority for the acquisition of goods.

Sections 20 and 21 provide the necessary contracting powers of the minister, including the power to fix terms and conditions of contracts, and instructions, terms and conditions with respect to other documents relating to contracts and their formation. Section 22 gives the minister the power to incorporate contractual clauses by reference.

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