Prime Minister Justin Trudeau removes his protective mask to answer a question during a press conference outside the GLOBE Forum at the Convention Centre in Vancouver, B.C., on Tuesday, March 29, 2022. THE CANADIAN PRESS/Chad Hipolito
Canadian manufacturers of masks and other COVID-19 protective gear are seeking more than $5 billion in damages from the federal government, alleging that Ottawa misled them about procurement and support for their products.
According to a statement of claim filed in Federal Court, the companies and their industry association assert that the government made "negligent misrepresentations," leading them to invest in PPE innovations, manufacturing, and production.
The companies, along with the Canadian Association of PPE Manufacturers, claim that over a three-year period starting from March 2020, the government provided misleading information regarding markets, direct assistance, flexible procurement, and long-term support.
The federal government will have the chance to respond to these allegations as the court case progresses.
The onset of COVID-19 in early 2020 prompted extensive measures worldwide to curb its spread, including lockdowns, vaccine mandates, and mask requirements.
The companies argue that they developed a "special relationship" with the government, creating a duty of care to small- and medium-sized businesses that swiftly adapted to produce protective equipment for Canadians.
They state that the government's misrepresentations resulted in approximately $88 million in investment losses and an estimated $5.4 billion in forgone market opportunities over a decade.
The companies were assured by the government, through initiatives like Canada's Plan to Mobilize Industry against COVID-19, of direct support to scale up production or adjust manufacturing lines. However, despite identifying masks and respirators as crucial items for pandemic response, the government did not engage in contracts with Canadian companies, the claim alleges.
Furthermore, promises of a decade-long contract with the industry association and businesses to compensate for procuring from foreign firms did not materialize, according to the claim.
Similarly, assurances of support for Canadian companies in replenishing the National Emergency Strategic Stockpile were not fulfilled, with the government opting not to procure masks and respirators from domestic sources.
The claim asserts that despite pledges to back the domestic industry, the government favored foreign competition, depriving Canadian companies of fair access to local markets and hospitals.
Additionally, the claim alleges that guidance from the Public Health Agency of Canada redirected Canadians from using manufactured masks like N95s in favor of cloth masks during the initial two years of the pandemic, a move deemed inappropriate by the manufacturers.
