Business
The rise and fall of Canada’s domestic PPE market
George Irwin, owner of Trebor RX Corp., which manufactured PPE masks for the COVID-19 pandemic, poses for a photograph outside what was his business before it went into receivership in Collingwood, Ont., on Wednesday, March 15, 2023. Both the federal and provincial governments have not bought any PPE from domestic companies after imploring them to help make PPE in the early days of the pandemic. THE CANADIAN PRESS/Nathan Denette
By Liam Casey
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 Stéfanie 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.”
This report by The Canadian Press was first published March 16, 2023.
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The Canadian Press
In a letter photographed Feb. 13, 2022, Utah professor Taowen Le sent a letter to Utah Gov. Spencer Cox in 2022 urging him to meet with a Chinese ambassador. Le is among China’s most vocal advocates in the state. An investigation found that China’s global influence campaign has been surprisingly robust and successful in Utah. (AP Photo/Jon Elswick)
By Alan Suderman And Sam Metz in Salt Lake City
SALT LAKE CITY (AP) — China’s global influence campaign has been surprisingly robust and successful in Utah, an investigation by The Associated Press has found.
The world’s most powerful communist country and its U.S.-based advocates have spent years building relationships with Utah officials.
Legislators in the deeply conservative and religious state have responded by delaying legislation Beijing didn’t like, nixing resolutions that conveyed displeasure with China’s actions and expressing support in ways that enhanced the Chinese government’s image.
The AP’s investigation relied on dozens of interviews with key players and the review of hundreds of pages of records, text messages and emails obtained through public records’ requests.
Beijing’s success in Utah shows “how pervasive and persistent China has been in trying to influence America,” said Frank Montoya Jr., a retired FBI counterintelligence agent who lives in Utah.
“Utah is an important foothold,” he said. “If the Chinese can succeed in Salt Lake City, they can also make it in New York and elsewhere.”
Here are some key takeaways:
LEGISLATIVE AND PR VICTORIES
The AP review found that China and its advocates won frequent legislative and public relations victories in Utah.
Utah lawmakers recorded videos of themselves expressing words of encouragement for the citizens of Shanghai in early 2020, which experts said likely helped the Chinese Communist Party with its messaging.
The request came from a Chinese official as the government was scrambling to tamp down public fury at communist authorities for reprimanding a young doctor, who later died, over his warnings about the dangers posed by COVID-19.
Around the same time, Utah officials were thrilled when China’s authoritarian leader Xi Jinping sent a letter to fourth grade students in Utah. A Republican legislator said on the state Senate floor that he “couldn’t help but think how amazing it was” that Xi would take the time to write such a “remarkable” letter. Another GOP senator gushed on his conservative radio show that Xi’s letter “was so kind and so personal.”
The letter was heavily covered in Chinese state media, which quoted Utah students calling Xi a kind “grandpa” — a familiar trope in Chinese propaganda.
State lawmakers have frequently visited China, where they are often quoted in state-owned media in ways that support Beijing’s agenda.
“Utah is not like Washington D.C.,” then-Utah House Speaker Greg Hughes, a vocal supporter of former President Donald Trump, told the Chinese state media outlet in 2018 as the former president ratcheted up pressure on China over trade. “Utah is a friend of China, an old friend with a long history.”
FBI SCRUTINY
Utah Republican Sen. Jake Anderegg told the AP he was interviewed by the FBI after introducing a 2020 resolution expressing solidarity with China in the early days of the coronavirus pandemic. It won nearly unanimous approval. A similar resolution, proposed by a Chinese diplomat, was publicly rejected by Wisconsin’s Senate.
Anderegg said the language was provided to him by Dan Stephenson, the son of a former state senator and employee of a China-based consulting firm.
Stephenson and another Utah resident, Taowen Le, are among China’s most vocal advocates in Utah.
Both men have supported and sought to block resolutions, set up meetings between Utah lawmakers and Chinese officials, accompanied legislators on trips to China and provided advice on the best way to cultivate favor with Beijing, according to emails and interviews. Both have ties to what experts say are front groups for Beijing.
After embassy officials tried unsuccessfully last year to get staff for Utah Gov. Spencer Cox to schedule a get-together with China’s ambassador to the U.S., Le sent the governor a personal plea to take such a meeting.
“I still remember and cherish what you told me at the New Year Party held at your home,” Le wrote in a letter adorned with pictures of him and Cox posing together. “You told me that you trusted me to be a good messenger and friendship builder between Utah and China.”
Both men said their advocacy on China-related issues were self directed and not at the Chinese government’s behest. Le told AP he has been interviewed twice over the years by the FBI.
The FBI declined to comment.
TAILORED APPROACH
Security experts say that China’s campaign is widespread and tailored to local communities. In Utah, the AP found, Beijing and pro-China advocates appealed to lawmakers’ affiliations with The Church of Jesus Christ of Latter-Day Saints, better known as the Mormon church, which is the state’s dominant religion and one that has long dreamed of expanding in China.
Le, who converted to the church decades ago, has quoted scripture from the Bible and the Book of Mormon in his emails and letters to lawmakers, and sprinkled in positive comments that Russell Nelson, the church’s president-prophet, has made about China.
PART OF BROADER TREND
Beijing’s success in Utah is part of a broader trend of targeting “sub-national” governments, like states and cities, experts say.
It is not unusual for countries, including the U.S., to engage in local diplomacy. U.S. officials and security experts have stressed that many Chinese language and cultural exchanges have no hidden agendas. However, they said, few nations have so aggressively courted local leaders across the globe in ways that raise national security concerns.
In its annual threat assessment released earlier this month, the U.S. intelligence community reported that China is “redoubling” its local influence campaign in the face of stiffening resistance at the national level. Beijing believes, the report said, that “local officials are more pliable than their federal counterparts.”
Authorities in other countries, including Australia, Canada and the United Kingdom, have sounded similar alarms.
A spokesman for the Chinese embassy in Washington told the AP that China “values its relationship with Utah” and any “words and deeds that stigmatize and smear these sub-national exchanges are driven by ulterior political purposes.”
___
Suderman reported from Washington. AP writer Fu Ting in Washington contributed to this story.
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