Public Health Agency’s Loss of $150 Million Due to Unfulfilled Vaccine Contract: Minister

Federal Health Minister Mark Holland rises during Question Period in the House of Commons on Parliament Hill in Ottawa on Sept. 25, 2023. The Canadian Press/Justin Tang

The loss of $150 million in taxpayer money by the Public Health Agency of Canada (PHAC) is due to an unfulfilled contract for COVID-19 vaccines, Health Minister Mark Holland said on Nov. 3.

The National Post first reported earlier this week about the loss incurred by PHAC, which figures in the government’s public accounts for 2023.

Under the section “Losses of public money due to an offence, illegal act or accident,” PHAC has an “Unfulfilled contract by a vendor” worth $150,000,000.

PHAC has refused to disclose who the vendor is, and Mr. Holland didn’t provide additional details while raising the issue unprompted in the House of Commons during question period. He said the accusations of waste are “completely unfounded.”

Mr. Holland said the failed contract relates to an advanced purchase agreement for vaccines and that the information had already been provided to the Standing Committee on Public Accounts (PACP) in the context of its study on the auditor general’s report on COVID-19 vaccines.

“All parties were able to review these documents with the appropriate confidentiality provisions in place due to a confidentiality agreement with the contractor,” said Mr. Holland. “Specific details of the contract, including the vendor name and financial information, could not be discussed publicly.”

After Mr. Holland mentioned the contract issue, Bloc Québécois MP Nathalie Sinclair-Desgagné followed up. “You’re asking yourself how it’s possible to lose so much money? Us too,” she said.

Ms. Sinclair-Desgagné, a PACP member, asked why the government couldn’t be reimbursed since nothing was delivered.

Mr. Holland said the beginning of the pandemic was a difficult time and that the government needed to ensure all options were available. Deals needed to be made with multiple vaccine manufacturers since it was impossible to know which product would work, he said.

Ms. Sinclair-Desgagné quoted comments from the Parliamentary Budget Officer to the National Post saying that the department should be able to provide some of the details about the $150 million loss.

Mr. Holland repeated that all the information had been made to available to MPs and the auditor general.

Having many options available was “so reasonable,” said the minister, adding that’s the “reason why Canada had among the best response to the pandemic throughout the world.”

Canada ranked fourth worst for all-cause excess mortality among countries of the Organisation for Economic Co-operation and Development during the COVID-19 period.

Non-Disclosure Agreement

MPs on the Public Accounts committee voted to view the vaccine contracts last March. Liberal MP Anthony Housefather said at the time that they would have to sign a non-disclosure agreement to do so, explaining the government had signed the contracts with manufacturers under unfavourable terms, providing them special conditions.

“It’s because these documents were signed at the beginning of a pandemic when everybody was desperate for vaccines, when companies were being told to rush vaccine production, do testing in an unprecedented way, in a way they normally don’t do it,” he said.

He added that the companies were exposed to “way higher liability” for rushing the products to market, skipping the testing that in a normal scenario would take years to complete.

“So that’s why these companies said, ‘If I’m going to deliver you this product that I haven’t tested in my normal way, I want to have different conditions.’”

Health Canada authorized the COVID-19 vaccines using a non-traditional process through an interim order and without the completion of clinical trials.