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Coronavirus: Canada’s supply of PPE won’t meet demand as economy reopens, trade expert says

Coronavirus outbreak: Feds continue to add to COVID-19 supply stores to meet future demand
WATCH: The federal government continues to add to the supply of personal protective agreement and related medical equipment needed to fight COVID-19.

As Canada’s economy begins to reopen and concerns of a potential second wave of the novel coronavirus grow, the federal government is struggling to secure a reliable supply of personal protective equipment (PPE) used to keep medical professionals, essential workers and ordinary citizens safe, say trade and supply chain experts who spoke with Global News.

Issues with quality control — including the delivery of roughly 10 million substandard N95 respirator masks — highlight some of the challenges the government faces when trying to gain a foothold in the constantly evolving global PPE marketplace.

READ MORE: How much protective equipment does Canada really need for COVID-19?

“There will not be enough supply to meet the demand,” said Omar Allam, founder and CEO of Allam Advisory Group (AAG).

A recent market survey completed by AAG, an Ottawa-based trade and export consulting firm, projects demand for medical- and non-medical-grade masks in Canada over the next four months will be 750 million units, and 3.3 billion units over the next year.

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The government, meanwhile, has touted its efforts to secure PPE from around the globe. Last week, Prime Minister Justin Trudeau also announced a deal with GM to produce 10 million made-in-Canada masks for front-line workers.

READ MORE: Feds continue to bolster PPE supply as COVID-19 pandemic continues

Despite the uptick in domestic production, Allam believes more still needs to be done to ensure the country’s supply of PPE is adequate.

He also said manufacturers such as automakers will eventually need to go back to making cars and other products, meaning other companies will need to fill the void in production once normal business activities are resumed.

“We need pioneers,” Allam said.

Supply and demand

Public Services and Procurement Minister Anita Anand said Tuesday that the government continues to purchase large amounts of PPE from international suppliers. This includes dozens of planeloads of supplies over the past 10 weeks, primarily from Chinese manufacturers.

As for how much PPE is enough, Anand said the government makes bulk orders above and beyond what provinces have asked for — although she hasn’t specified exactly how much PPE will be needed.

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“In terms of establishing a ceiling on personal protective equipment, that is still an analysis that we are undertaking as we see demand for personal protective equipment continue to grow,” Anand said in an interview with the Canadian Press in late May.

According to government data, the amount of PPE delivered so far is significantly less than what’s been ordered. For some items, such as gloves, the government has received less than five per cent of its total order.

“The problem is the market is flooded with some good products that are credible and then there are a lot of shady products out there in the market because some people are just trying to make a quick buck,” Allam said.

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As of May 26, the federal government has ordered roughly 330 million surgical grade masks and received 100 million. It ordered a billion pairs of gloves and has received 40 million.

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The government also ordered about 150 million N95 masks — those used by medical professionals and other front-line workers — but as the Globe and Mail reported in May, the government was forced to cancel orders of roughly 50 million masks last month because of quality concerns, including the delivery of 9.8 million substandard masks from a Chinese manufacturer supplied by a Montreal-based company.

To date, the government has received 11.9 million N95 masks, of which just two million meet quality standards. This represents less than two per cent of the government’s total order of 107 million N95 respirators.

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Mahesh Nagarajan, an applied mathematician and supply chain expert from the University of British Columbia, said the amount of PPE delivered so far is miniscule compared to what the government has ordered.

He also said governments are struggling to decide what the real demand for PPE is. That’s because it’s still unclear exactly how economies will reopen and what sort of safety requirements will be put in place.

If schools require teachers and students to wear masks when they reopen, this would have a significant impact on global demand, Nagarajan said. The type and quality of PPE used for different activities will also play a big part in determining how much is needed.

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“The government is scrambling,” he said.

Well-established supply chains — including manufactures and suppliers — have also been overwhelmed by the sudden spike in demand, he said. This has led to new manufacturers popping up with few quality controls and suppliers turning to untested sources of PPE.

“All that has sort of gone to the dogs with this massive fluctuation in demand,” Nagarajan said.

Domestic production of PPE

On Tuesday, Trudeau reiterated these remarks, saying the government has already delivered hundreds of millions of pieces of PPE to front-line workers across the country.

However, he also acknowledged more still needs to be done to secure a reliable supply of PPE, especially as the economy begins to reopen.

“As we restart the economy, demand for supplies will go up,” Trudeau said. “Canada must be able to keep up.”

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Pressed to explain apparent deficiencies in the amount of PPE received so far — and how close Canada is to meeting its domestic production goals — Trudeau said the government is working to secure both international and domestic supplies.

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“We started domestic production on many of these items so that we don’t have to be just reliant on overseas imports,” he said.

“We continue to have enough supplies to supply the provinces and their needs right now. But as they reopen, we know that we’re going to need more.”

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The government has expanded domestic procurement efforts since the outbreak of COVID-19 began, including a deal with GM to produce 10 million masks over the next year, plus another deal with Montreal-based Medicom to produce 20 million masks.

Innovation Minister Navdeep Bains said more than 700 Canadian companies have retooled and begun producing PPE, including gowns, face shields, masks and hand sanitizer.

The government has also announced a deal with Vexos, a Markham, Ont., electronics manufacturer, to produce 10,000 made-in-Canada ventilators.

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“Throughout this period of crisis, we continue to see Canadian companies across the country making tremendous contributions to fight COVID-19,” Bains said.

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But Allam and Nagarajan say more still needs to be done if Canada is going to meet its PPE goals.

This means making sure supply chains of raw materials and other items needed to make protective equipment are available to Canadian producers, plus ensuring government investments in domestic production and PPE innovation continue even after the pandemic has eased.

Long term, Allam believes at least 40 per cent of PPE should come from domestic production.

This, he said, is to ensure a reliable supply for ongoing use and to fill the country’s strategic national stockpile, which will become even more important if a second wave of COVID-19 hits and when any future pandemics arrive.