The Breathe Medical Manufacturing plant in Kelowna

Image Credit: Submitted/Breathe Medical Manufacturing

It was just over a year ago that Okanagan distilleries – along with their contemporaries across the country – added hand sanitizer to their product lists.

At about the same time, Breathe Medical Manufacturing was hiring 180 people to set up a plant in Kelowna to make 46 million medical grade face masks.

All this was in response to federal government calls for desperately needed personal protective equipment that was in short supply because China kept much of what it made for themselves.

Now, the government is going back to buying cheap Chinese products and workers are wondering why they’ve been laid off.

“We all could be producing something but, instead, the government is paying for us to be on EI,” Stone Pearle, who is on temporary layoff from Breathe, told iNFOnews.ca. “I’ve got two young kids so I get to enjoy the summer with them but I’d much rather be working.”

Once Breathe completed its contract with the federal government it stockpiled product and sought other buyers. But, it was forced to temporarily lay off many of its workers in late May.

Rob Balazs, the company president and CEO, hopes that will change as early as next week but, as chair of the Canadian Association of Medical Mask Manufacturers, he’s also trying to get the government to change the way it does business to prevent some other new Canadian companies from folding or shifting their production focus. He's looking at the bigger picture and trying to make sure Canadian businesses have the capacity to ramp up production when the next emergency happens.

READ MORE: COVID created this Kelowna company but will Canada keep it going?

“We are seeing Chinese products dumped in the marketplace,” Balazs said. “Right now, the market is flooded with procedural masks and they’re being dumped below raw material costs.”

The Quebec government just signed a contract for masks at three cents each, he said. Raw materials alone cost two to five cents.

Part of the problem is the way the federal government’s buying process works.

Instead of contracting directly with companies like Breathe, there are three large group purchasing organizations that control 95 per cent of the health care buying in Canada. Those are now buying many of their supplies offshore.

The government has made some changes, like awarding a 10-year contract to a large Ontario firm and providing it with a $4 million loan to build a plant, Balazs said.

But more needs to be done. Some smaller manufacturers who geared up with new equipment to help fill the mask shortage may be forced to close within a couple of months, he said.

“The ask from the federal government is very simple,” Balazs said. “You want to make a change? Then open up the contracts these health authorities have with these (group purchasing organizations) and mandate a certain percentage of the procurement be done from Canadian manufacturers. That’s how you secure your supply.”

That’s not much different than the situation facing distilleries.

Okanagan Spirits, for example, jumped in to produce high grade alcohol for hand sanitizers last spring.

That was largely for local needs, although it shipped sanitizer across the country.

READ MORE: Okanagan distillery gets boost from Vernon brewery to create more hand sanitizer

Spirits Canada, a national association that represents mostly larger distilleries, was asked by the federal government to produce 500,000 litres of alcohol a month, president and CEO Jan Westcott said. They quickly ramped up to 1.3 million litres a month for six or seven months.

Some did it for free while others did it at cost. No one made money on it, Westcott said.

Then the government awarded a $250 million contract to buy supplies from China, including a large quantity of alcohol that Westcott understands to be of a lower quality than what the Canadians were producing.

“Some of our companies were quite annoyed that the government did that and didn’t tell anybody,” he said. “It came up afterwards. They (government) came to us. We responded only to find out that, rather than come back to the industry and say: ‘We want to spend $200 million buying stuff from you, can you gear up?’ We would have. Instead, they went and spent that money elsewhere.”

While distillers didn’t have to buy new equipment like the mask makers did, they still had costs and it cut into the production of their regular products.

The association also set up a partnership with three other organizers to coordinate the making and packaging of the sanitizers.

“The irony is, throughout this whole piece, we did work closely with Health Canada – and I do give credit to Health Canada for putting procedures and policies in place to allow Canadian companies to make hand sanitizer to standards, to specs, to be safe products,” Westcott said. “But it seems, when you get beyond Health Canada, they weren’t procuring things. It went to some other part of the government.”

It was that part of government that is now buying from overseas suppliers instead.

The damage done is as much or more in terms of bad faith than dollars lost.

“If ever there was an opportunity to look inwardly and do things in Canada and try to build up that capacity, this was it,” Westcott said. “What the government has done, it has burnt any good will that the people had. It’s not the way to get people to step forward the next time when something else goes on.”

Pearle, for his part, does not understand the business side of things. All he wants is to get his good job that he loves back.

“We make good masks, that’s all I know,” he said. “I’m 23. I don’t have any business experience of any sort. I’m just an operator.”

He worked in the hospital industry but loves operating a machine instead.

“I’ve been looking for other work but I really want to go back,” Pearle said “That’s all anyone really wants.”

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