Front Burner - In brief: Global scramble for PPE is 'utter cutthroat chaos'

Episode Date: April 14, 2020

As desperate countries around the world compete to secure as much personal protective equipment as they can, Canada is establishing a new supply chain to bring in millions of N95 masks and other supplies. Today, on Front Burner, CBC senior reporter David Cochrane explains how Canada's diplomats and consultants in China are working to set up a new supply chain amid the pandemic.

In the Dragon's Den, a simple pitch can lead to a life-changing connection. Watch new episodes of Dragon's Den free on CBC Gem. Brought to you in part by National Angel Capital Organization, empowering Canada's entrepreneurs through angel investment and industry connections. This is a CBC Podcast. Hey everybody, Jamie here. This is Front Burner, our nighttime edition in brief. Hey, everybody, Jamie here. This is FrontBurner, our nighttime edition in brief. I've got CBC senior reporter for The National, David Cochran, here with me tonight. Hey, David, how's it going? Hey, Jamie. Thank you so much for being with me today. And I want to talk to you more in depth about some reporting you've been doing about how Canada has created its own PPE

supply network out of China, essentially personal protective equipment. But first, the prime minister was back today with a daily briefing after a short Easter break. And I'm hoping you can go through briefly with me a few of the big headlines. You know, what were the major announcements? What stood out to you most? I think the big thing that really stood out to me from the prime minister today was just that, I think the big thing that really stood out to me from the prime minister today was just that as there is this broader conversation happening about when does the economy reopen? When do things get back to normal? You see the president talking about that and some governors talking about that in the United States.

The prime minister is not even really ready to begin that conversation. While you have other jurisdictions sort of announcing measures to bring the economy back, what we saw today were other measures to help the economy really kind of hunker down. The promise of rent support for small businesses coming, as a lot of business owners are really struggling with that. Financial help for students, for example, and the promise of sectoral bailouts for like oil and gas, transportation, tourism and hospitality, all of those coming in the next couple of days. So all of this, of course, will be done in different ways in different jurisdictions across the country, because this epidemic in Prince Edward Island is not the same as this epidemic in Alberta, for example. But at a big picture national level,

Justin Trudeau is very clear that we are still weeks and weeks away before we can really start talking about this. The reality is it is going to be weeks still. We recognize that it is going to be important to get our economy going and that we will have to do it in phases. We will have to. And, you know, another thing I noticed, and I was hoping you could take me through, was as of midnight tonight, travelers arriving in Canada by land, sea or air must show they have a credible quarantine plan or they'll be required to self-isolate in a hotel. So this is new as well, right? Yeah, this is a new national policy, but this sort of borrows quite heavily from something that British Columbia put in place. Premier John Horgan said they wanted people to have a credible plan and would be asked a fairly robust series of questions when people came into British Columbia to make sure they have a credible plan of isolating themselves so that they don't risk infecting other people and vulnerable populations. So they would put them in a facility, whether it's a hotel or whatever, to make sure they had somewhere to go where they could be looked after and not be a risk to anyone else. And this is an idea that's now been adopted nationally.

So it comes into place at midnight. There was already a mandatory order to self-isolate, but you were sort of left to your own good judgment and goodwill to do that. And they sort of took it at faith that Canadians would do it coming back. Well, now they're sort of taking a bit of that good faith out of it and coming up with a, okay, show us your plan. If you don't have a plan, welcome to this hotel. Welcome to this facility where you can spend the next 14 days. It is a real escalation in sort of border controls, but it's one that the federal government is borrowing from the British Columbia provincial government. Okay, and I saw that they said that the federal government would cover the cost for that as well. Another headline that came out today, Trudeau said that Canada received its fourth cargo jet of tens of thousands of critical medical supplies from China. And that

went to Edmonton early Monday morning. And I think this brings us to your work, and what I'm hoping we can talk a little bit more about today, this supply network that's been created. Let's start with what the global market has been like for countries trying to gather personal protective equipment, PPE. I know Deputy Prime Minister Christopher Freeland called this the Wild West. And that might be understating it. I mean, really, it's just been utter cutthroat chaos. I mean, we've come to a point where everybody in the world is looking for the same short supply of medical equipment from N95 masks to surgical masks to gowns to gloves, and even to ventilators. Everybody is using whatever buying power or leverage they have to get this equipment for their citizens at the expense of other citizens. It's been a real

free-for-all. And you saw stories of sort of the chaos and even the piracy start to emerge, masks destined for Germany being redirected to the United States. You hear these maybe apocryphal stories of countries sending official government jets to China, carrying bags and suitcases full of cash to buy supplies right on the tarmac or go to the factory door and buy them out from under other countries. So just because you made an order, it doesn't mean it would actually ever show up. Or if it did, would it show up on time and would it show up in the volumes that you ordered it? Essentially, it was a feeding frenzy on the global market for these supplies, with a lot of them being made in China.

Right. I mean, that is sort of the obvious question I was going to ask you next. China is the place where a lot of this stuff is being made. Chinese factories, a lot of the Chinese factories have only roared back to life in the last little while because of the shutdowns that happened in that country because of the pandemic. Of course, everything started in Wuhan in Hubei province in China. So their industrial capacity was down. The demand has been going up. There was a hesitancy by some countries to go aggressively into the market to buy a lot of these supplies because the advice from people like the World Health Organization was, let's leave it for China. Let's leave it for Italy.

Let's leave it for Iran. Let's leave it for the places that are truly in the middle of the epidemic right now so that they can have their supplies and we're not hoarding and diverting supplies away from them. not hoarding and diverting supplies away from them. Well, now we've gotten to a point that every single country on earth is dealing with this and every single country on earth is looking to buy the same stuff. So tell me about this network that Canada was able to create. How did it come about? One of the first things you need to understand about the federal government and procurement of medical supplies is that the federal government doesn't do this. It's not a thing it normally does. It has the national stockpile through public health, but that's pretty small scale compared to the

amount of procurement that's being done at the provincial level. The provinces run the health systems. They are the big buyers of all of this stuff. So they have their own supply chains. Ottawa kind of doesn't. And it had to build one from scratch and learn how to do this at the worst possible time in world history. So China being such a key source of this, that's where they had to look. And there's really kind of a two-track strategy here. There's buy, buy, buy, and then there's make, make, make, which is the way Navdeep Bains, the industry and innovation minister, has described it. Navdeep Bains, the industry and innovation minister, has described it. There is a significant retooling of Canadian industry to create a domestic supply chain of everything from gowns to gloves to sanitizer to ventilators to N95 masks and testing kits. But that's going to take

weeks, if not a month or more, for some parts of that to ramp up. So in the short term, you have to buy what you can from countries where it's made. In China, Canada has essentially under the leadership of Dominic Barton, who's our ambassador to China. He has repurposed the global affairs staff over there from trying to sell Canadian goods and Canada to the Chinese to trying to buy medical supplies in China to send back to Canada. So people who have been lifelong career diplomats are now working as like procurers of medical supplies. They don't have a lot of experience with that, right? That is not what you sign up to do when you start a career in the Canadian Foreign Service.

So they need some guidance. So the thing that Barton brings to the table is he's new to diplomacy. He's new to any kind of sort of like official public service. But he has a lot of business experience and business experience in China. He was a managing director of McKinsey, one of the big global consulting firms. He's done things like served on state-run investment banks and development banks in China. So he knows China. What they've done is that they've hired what has been described

to me as a multinational management consulting firm. They won't tell me the name because they're worried about sensitivity, but it's a firm like Deloitte or Ernst & Young, EY as it's known. Okay, or McKinsey, I guess? It's not McKinsey. No, they have not hired McKinsey. I've been assured that they have not hired Barton's old firm. So it's one of the other ones. They just will not say which one it is. And what this company is bringing to the table is a good understanding of Chinese supply chains and the manufacturing sector. So there's a lot of people ramping up to build and sell masks. It doesn't mean they're good at it. It doesn't mean they're reliable. It doesn't mean they're credible.

You can buy a million masks and they'll all be junk. So what they're counting on the consulting firm to do is to steer you towards credible and reliable people with a track record and a history. So that's how you identify where you're going to buy it from. Public Service and Procurement Canada negotiates the buy based on the volumes that are available and also based on what needs provincial governments have asked them to get. But then there's the question of going back to what we've heard from Anita Anand, the minister, just because you make an order doesn't mean it's going to arrive. Right. So how has it been working?

So the key there has been another company that they've hired, Bellore Logistics. It's a French company. It's operated out of Shanghai since about 1994. It has operations all over the world. It's really one of these global companies. And they're a transportation contractor. So think trucks and think a warehouse. You've got to get stuff from the factory. You've got to get it in a warehouse.

They've leased a warehouse that's next to the Shanghai airport. So once the consultants have told them, these are the people you should buy from, they then go in and negotiate an order using the global affairs employees they have in China or using the people back here in Ottawa, because this is really around the clock operation because of the time difference. They then negotiate with the factory and use these transportation contractors to get the delivery, bring it to the warehouse, put it under lock and key near the Shanghai airport, and then work on the customs clearance and the landing rights so that this growing fleet of planes from Air Canada and Cargojet can make these runs into

Shanghai, load up, and bring it back to Canada as quickly as possible. It's still in its early stages, right? There's only been four or five flights, I think. The numbers sort of change hourly and daily because it's almost operating load and go, Jamie. Like the minute they've got the warehouse loaded up, let's go get it and get it back to Canada. And then they start distributing. So the prime minister at his news conference talked about 1.1 million N95 masks and millions of gloves coming in on these flights, right? The cargo jet flight that landed in Hamilton on Saturday had 75,000 pounds of personal protective equipment. And this is all on top of what the provinces are doing. Because Alberta, for example,

has this robust procurement system. They're so well stocked that they're shipping things out to other provinces like BC, Ontario, and Quebec. So their procurement game is fantastic. The federal government is just getting into it, and this is what they've settled on and tried to build. So far, some success, but it's still a very sort of fragile supply chain just because of the global stress and competition that exists. Is it fair for me to say, though, you know, we've been hearing so much from frontline health care workers about very limited stocks of PPE, that even these plane loads, four or five plane loads that have just come through, like this will hopefully go a long way in

helping to mitigate some of those concerns. I would imagine, too, we've got this crisis in long-term care homes. We're looking to get more PPE into those establishments as well. Yeah, I mean, it helps. I don't know if it completely eliminates all of the stresses and the pressures because I'm not sure there's any one single measure that can eliminate all of the stresses and the pressures. I think the critical point about this, this is a bridge. This is how they are trying to bridge until Thornhill Medical is pumping out ventilators, until Medicom is pumping out Made in Canada N95s.

We now have Spartan Bioscience pushing out rapid test kits from here in Ottawa. This is a bridge to buy everything that is available as it becomes available to get it into warehouses and get it into hospitals in Canada until Canada can get to the point that it is self-sufficient. And I think, Jamie, that is all going to start a much more serious conversation when this is all over about self-sufficiency on core medical supplies, when this is all over about self-sufficiency and core medical supplies, right? Like we are so reliant on trade from other countries that may be unreliable for various political reasons on getting what we need for doctors and nurses and all the other health professionals are putting it on the line every single day that this temporary supply chain

that Canada is building, there will probably be a very serious conversation about making parts of that permanent once this is over, because this is not the first pandemic of our lifetime. It is the most severe pandemic of our lifetime. And I don't think anyone wants Canada to be caught this short and unprepared ever again. Absolutely. This is something Doug Ford has been saying a lot in his daily press conferences, that when this is all over, he's going to ensure that we have these supply chains here. David Cochran, thank you so much. This was really, really interesting. Thank you. In the Dragon's Den, a simple pitch can lead to a life-changing connection.

Watch new episodes of Dragon's Den free on CBC Gem. Brought to you in part by National Angel Capital Organization. Empowering Canada's entrepreneurs through angel investment and industry connections. That's all for today. I'm Jamie Poisson. Stay tuned for our episode tomorrow morning. We're talking about the WHO and its role in the pandemic. For more CBC Podcasts, go to cbc.ca slash podcasts.