The rise and fall of Canada’s domestic PPE market
Most Canadian businesses that answered federal and provincial calls during the pandemic to build up a domestic sector for personal protective equipment have collapsed.
The association that represents Canadian PPE companies says 90 per cent of those businesses have been forced to close or pivot to other industries because the federal government and Ontario have given contracts to a massive American company and a Quebec operation.
“We’ve got an industry that is just running on fumes,” Barry Hunt, the president of the Canadian Association of PPE Manufacturers, said in an interview.
“Most of them are out of business and the ones that aren’t out of business are going out of business quickly.”
A major issue, Hunt said, is large PPE orders the federal and Ontario governments placed with American company 3M, which has a facility in Brockville, Ont., and Quebec-based Medicom. Hospitals — who buy as larger groups — have also shut out domestic PPE suppliers, he said.
“There was a promise to procure at the end and that has never happened,” said Hunt, whose association has 15 companies remaining as members.
The scramble for PPE began in the spring of 2020, when governments around the world rushed to procure masks, gowns, gloves and other protective gear as COVID-19 spread. The virus hit Canada with full force in March 2020.
In April 2020, George Irwin answered government pleas to help. He paused operations at his family-owned toy company, Irwin Toy, to import masks to Ontario.
As many countries struggled to procure masks, Irwin’s connections in China, along with Air Canada’s help, allowed him to secure 2.5 million masks.
That success prompted both the Ontario and federal governments to ask Irwin to consider setting up a plant in Canada, he said. He crunched the numbers and believed he could make a better mask than the ones from China for about the same price.
He received about $2 million in grant money from Ontario and put in about $6 million to build a plant to make masks in Collingwood, Ont.
With his background in toys — a constantly evolving, innovative industry — Irwin worked with others and created an antimicrobial four-layer mask. He also created a reusable and recyclable respirator mask.
Irwin said he believed Prime Minister Justin Trudeau and Ontario Premier Doug Ford when they said they wanted to create a domestic PPE sector.
But neither government has purchased a single mask from him, he said.
Irwin’s company went into receivership last summer. He could lose everything, including his home.
“I’m pissed off,” Irwin said. “We did nothing wrong, all we did was make a better product that’s been ignored.”
Others have similar stories.
Paul Sweeny runs Swenco in Waterloo, Ont., a business started by his father 60 years ago.
They make components for safety shoes and, in 2019, got into the N95 mask business after signing a distribution deal with a company in Singapore.
When COVID-19 hit, Sweeny sold a shipping container of N95s in three days.
“We decided right then and there, let’s get into the mask business,” he said.
Ontario gave him a $2 million grant, he said, noting the total investment in the business sits at around $6 million.
Sweeny now has 11 machines in his plant, a massive clean room, automated packaging and robots. The plant has the capacity to make upwards of 25 million masks a month and employ 60 people. But that isn’t happening right now.
“The plant is idle,” Sweeny said, adding he wants no more platitudes from governments.
“Just give me an order so we can get the machines operational.”
Hunt, of the PPE manufacturers association, said governments owe companies who answered the emergency pandemic call. Ottawa and Ontario may have provided funding and helped with research and development, but they haven’t come through with orders, he said.
“If the governments are never going to buy Canadian PPE, and you’ve asked all these companies to invest and develop all this stuff, then give them their money back,” Hunt said.
“Let them get out and transition to start something else.”
What really upsets many companies, Hunt said, is the announcement by Trudeau and Ford in August 2020 that they were investing $47 million in 3M to produce N95 masks for the governments over the next five years.
Hunt runs a company that makes reusable and biodegradable respirators — made from corn — with no hard plastic or metal, and believed after conversations with the federal and provincial governments that he, and other Canadian companies, would get business from them.
“We were totally blindsided by the 3M deal,” Hunt said.
The province’s Ministry of Public and Business Service Delivery did not answer questions about the deals with 3M and Quebec’s Medicom, or if it planned to help the struggling PPE companies.
Spokesman Colin Blachar said it had created a stockpile of PPE from Ontario manufacturers and that “93 per cent of the forecasted PPE for the next 18 months will be purchased from Ontario or Canadian-based manufacturers.”
Public Services and Procurement Canada said the federal government took “an aggressive procurement approach” at the start of the pandemic to meet immediate and long-term medical supply requirements. As the pandemic has evolved, the government’s requirements for PPE have too, it said.
“We are grateful for all Canadian companies that answered the Government of Canada’s call to action to support the pandemic response,” spokeswoman Stefanie Hamel wrote.
“These efforts helped to secure domestic production of critical PPE and medical supplies that were urgently needed by front-line healthcare workers and helped to meet the most urgent and immediate demands for personal protective equipment.”