Cabinet Not Disclosing Federal Funds Lost on Failed Vaccine Factory: Federal Records

A vial of a plant-derived COVID-19 vaccine candidate, developed by Medicago, is shown in Quebec City on July 13, 2020 as part of the company’s Phase 1 clinical trials in this handout photo.The Canadian Press/HO, Medicago

The Liberal cabinet is not disclosing the total amount of federal funds lost on investments in a Quebec-based COVID-19 vaccine manufacturing factory that was shut down by its parent company in February, according to newly released records.

In an Inquiry of Ministry tabled in the House of Commons on March 27 and first reported by Blacklock’s Reporter, cabinet said that financial details between the government and Medicago Inc., the company involved, are private and cannot be released publicly.

Medicago, the manufacturer of a plant-based COVID vaccine called Covifenz, announced on Feb. 3 that it would be ceasing all operations after its parent company, Mitsubishi Chemical Group, cut all future investments in the company.

The federal government previously said in October 2020 that it would invest up to $173 million in Medicago, with part of the funding going toward building the company’s Quebec City factory.

“Total authorized support for this project was $200M, against which $101 million was disbursed in fiscal year 2020-21 and $59 million was disbursed in fiscal year 2021-22,” Industry and Innovation Minister François-Philippe Champagne said in the Inquiry document.

The document did not note how much of that funding the federal government expects to recover despite Conservative MP Stephen Ellis specifically requesting the figures in an order paper question on Feb. 6, days after Medicago announced it would be shutting down.

“The agreement with Medicago has legally-binding provisions to protect the taxpayer in the event of a default, sale or other event,” Champagne said in the Inquiry document. “Parent company Mitsubishi has committed to work with the government to make sure it meets its obligations.”

‘Confidential Information’

Public Services and Procurement Canada (PSPC) said in the Inquiry that it awarded an advance purchase agreement (APA) to Medicago in November 2020 on behalf of the Public Health Agency of Canada to obtain “20 million firm doses and up to 56 million additional optional doses” of the company’s Covifenz vaccine.

However, PSPC said the agreement included “strict confidentiality provisions” preventing either party involved from releasing “financial details and the information pertaining to the relationship.”

“The terms and conditions of the APA ... are considered confidential information between both parties,” said PSPC.

The federal department added that the government had already “launched discussions” with Medicago to terminate the agreement by mutual consent prior to Mitsubishi pulling its funding of the company due to Covifenz delivery delays and changes to Canada’s vaccine-supply needs.

Regarding Ottawa’s previous $173-million investment in Medicago, Champagne said in February that recovering the funding was not the federal government’s first priority in dealing with the company’s shut-down.

“The first order of business is really to try to find a partner who can help us preserve the jobs, preserve the technology, and the intellectual property,” he told reporters on Feb. 3.