The Public Health Agency of Canada violated federal rules when it gave companies $618 million in cash advances to produce personal protective equipment (PPE) and medical supplies.
First reported by Blacklock’s Reporter, Canada’s auditor general determined in a recent report that the Public Health Agency did not conduct the required risk assessments before giving firms cash advancements.
“We found the department could not always demonstrate it conducted specific assessments for contracts subject to advance payment, to ensure for example the suppliers’ financial viability,” the report read.
“Advance payment was made in 36% of the contracts we examined. These contracts are considered riskier since the government might pay for goods it does not receive. We found the value of the advanced payments made in the contracts we examined ranged from 20 to 80% of the original value.”
Auditor General Karen Hogan said she was not able to determine exactly how many firms failed to fulfill the terms of their contracts.
In one instance, the Public Health Agency gave Spartan Bioscience Inc. a $16.6 million cash advancement to produce test kits, only for the firm to go bankrupt before any goods were delivered.
“There’s about $618 million out of the contracts that we looked at that were prepayments,” she said.
“I do not have a dollar figure where contracts were awarded with prepayment and goods not received.”
Since the beginning of the pandemic, the federal government has scrambled to source PPE and medical supplies, often by subpar products at ridiculous markups in the process.
It was not until after the pandemic hit that Canadians learned the government’s emergency supply of PPE was dangerously low.