Health minister says $150 million PHAC loss related to vaccine deal

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OTTAWA – After over one week of stonewalling by his department, Health Minister Mark Holland says a mysterious $150 million loss by the Public Health Agency of Canada for an unfulfilled contract was tied to an “advanced purchase agreement” for COVID-19 vaccines.

In response to a question on the cost of living by the Conservatives, Holland said accusations by opposition parties of wastefulness are “completely unfounded”.

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“They’re talking about an advanced purchase agreement for vaccines,” he told the House in what is the first shred of information the government discloses about the $150 million loss since National Post first began asking it questions on Oct. 24.

Thursday, National Post reported that Public Health Agency of Canada (PHAC) declared the impressive write-off in the latest government public accounts for an “unfulfilled contract by a vendor” with no expectation of recovering the money. 

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Pressed by this newspaper for information about any details on the unfulfilled contract since early last week, such as the identity of the vendor, the nature of the deal and the product or service that was not received, PHAC repeatedly refused to disclose any information for one week.

In a statement Tuesday, PHAC spokesperson Mark Johnson said the unfulfilled contract was covered by a confidentiality agreement and to reveal any information would expose the government to legal action.

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Holland’s office also declined to offer any details about the contract Thursday and said the minister was not available for an interview.

But in the House Friday, Holland said details about the unnamed contract were disclosed to the House Public Accounts Committee as part of its study on the auditor general’s report on COVID-19 vaccine procurement earlier this year. At no point did his department or office disclose that information in response to previous queries.

The government offered some MPs access to unredacted COVID-19 vaccine contracts in the last year, but did so during a confidential briefing during which attendees were not allowed to leave the room with the documents or any notes taken on the contracts.

Responding to a question by Bloc Québécois MP Nathalie Sinclair-Desgagné, Holland added in French that the government signed vaccine pre-purchasing agreements with multiple COVID-19 vaccine companies early in the pandemic to ensure a quick supply for Canadians.

“It was impossible to know at that time which would be good for people. That’s the reason why it was important to try all options, and that’s the issue here,” he said.

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Holland’s statement in Question Period comes after the Conservatives and Bloc Québécois published a letter Thursday evening demanding the House Health committee hold an “emergency” meeting to address the “egregious abuse of taxpayer money.” Earlier in the day, the NDP had also promised to raise the matter in Parliament.

“Another $150 million in taxpayer waste appears to have vanished. The Public Health Agency of Canada and the Minister of Health report to this committee and must be accountable,” reads the letter signed the four Conservative and one Bloc MP on the health committee.

During the summer of 2021, the federal government signed seven pre-order contracts for COVID-19 vaccine doses in the hopes of receiving doses as soon as possible once any of them were approved for use by Health Canada. To date, it has refused to disclose the amounts it paid for any of those vaccines.

Those contracts were with Moderna (up to 44 million doses), Pfizer-BioNTech (up to 51 million), Johnson and Johnson (up to 38 million), Novovax (up to 76 million), Sanofi-GlaxoSmithKline (up to 72 million), Medicago (up to 44 million) and AstraZeneca (20 million).

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Of those seven, only Sanofi-GlaxoSmithKline’s vaccine was never authorized for use by Health Canada. Medicago also cancelled its Health Canada authorization after the World Health Organization refused to accepts its vaccine for emergency use due to the company’s ties to tobacco giant Philip Morris International.

The federal government gave Quebec-based Medicago $173 million in 2020 to both develop the vaccine and expand its manufacturing facility in Quebec City.

During a press conference in February, Innovation Minister François-Philippe Champagne refused to confirm if the government would try to recoup any or all of the $173 million.

Medicago did not respond to a request for comment late last week on if it was the vendor tied to PHAC’s $150 million loss.

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