Federal health agency wasn't ready for pandemic equipment demand, auditor finds
AG Karen Hogan's review says Public Health Agency of Canada failed to address problems in stockpile management
The Public Health Agency of Canada was not adequately prepared for the COVID-19 pandemic because it ignored internal audits that found serious gaps in the National Emergency Strategic Stockpile (NESS), Canada's auditor general reported today.
Auditor General Karen Hogan said the health agency's management failed to address "long-standing issues" in how personal protective equipment (PPE) and other medical devices were managed in the NESS, which was created in part to supply provinces and territories with crucial goods during a crisis like the COVID-19 pandemic.
Hogan found that PHAC had inadequate inventory control and it had little sense of how much PPE would be required if a pandemic hit our shores.
She concluded that — despite two separate audits that explored the sorry state of the NESS in 2010 and 2013 — the bureaucrats in charge of this national supply of N95 respirators and testing swabs and ventilators did little to make necessary changes.
"We found that information needed to govern, oversee and manage the federal stockpile was missing, outdated or lacked clarity. This had a negative impact on the operation of the federal stockpile," said the AG's review.
"As a result, the agency was not as prepared as it could have been to respond to provincial and territorial government needs."
PHAC did not track the age or expiry date of some equipment — which meant that some of Canada's existing supply of PPE was essentially useless by the time the World Health Organization declared COVID-19 a pandemic in March 2020.
The PHAC failed to track essential information "needed to ensure that inventory in the stockpile was not obsolete," the review found.
WATCH: Canada's auditor general says country 'was not well prepared' to face the pandemic
The AG also found that some of PHAC's PPE records were "inaccurate" and there was "a lack of timely and relevant management information," which left the system struggling to keep up with insatiable demand from the provinces and territories in the early days of the crisis.
PHAC was sometimes "unable to correctly track items" at the eight federally managed warehouses, leaving officials in the dark about what they actually had on hand.
Speaking to reporters after the report's release, Hogan said PHAC's inventory control was so poor that auditors couldn't determine with any level of certainty how much PPE was available at the outset of the pandemic.
"We couldn't stand behind the numbers that were there," Hogan said. "What we did find, however, is that they often did not track the expiry dates in the system at all."
The NESS was so short on supplies when the pandemic began that the federal government couldn't meet most provincial demands for equipment until new orders started to arrive in April 2020 — weeks after Ottawa helped coordinate a nationwide shutdown of social and economic life.
"The NESS was not prepared to respond to a pandemic," Hogan said.
She said PHAC management blamed "budget constraints" for its failure to heed the 2010 and 2013 internal audits. Because the stockpile is used so infrequently, there was no sense of urgency when it came to fixing its problems, Hogan said.
"You don't wait for a rainy day to rush out and buy an umbrella. You take the time, you invest, you have the umbrella in your closet — that's exactly what the NESS should be. It's Canada's umbrella for a rainy day. The agency needs to take the time to invest in that going forward," she said.
To avoid a repeat of these inventory issues, the AG has recommended the health agency develop a "comprehensive management plan" for the NESS, with a clear timeline for completion.
"When it's bad, let's not focus on how bad it is and why did it get to the situation it got to. Let's focus on how to move forward," Hogan said.
PHAC said today it accepts the AG's findings and promised to have such a plan in place "within one year of the end of the pandemic."
'We have learned these lessons': Hajdu
Health Minister Patty Hajdu said that while it's clear the "stockpile did not have sufficient PPE," the public health agency's response has "come a long way" since those early days.
PHAC is now adequately supplying provinces and territories with what they need to combat the pandemic, she said.
"The auditor general has provided very useful feedback and the agency has already pursued some of those suggestions," Hajdu said.
Hajdu said the federal government will ensure there is a "robust" and "flexible" emergency stockpile in place ahead of the next crisis. "We have learned these lessons," she said.
WATCH: Health Minister Patty Hajdu responds to AG's report
While she identified major shortcomings, the AG also found that once the severity of the pandemic was better understood, PHAC, in collaboration with Health Canada and Public Services and Procurement, worked to secure a steady supply of PPE to address critical shortages experienced by some frontline health care workers and patients.
"When faced with the pressures created by the pandemic, the agency took action," the AG's review said. "We found that the agency improved how it assessed needs and purchased, allocated and distributed equipment."
Starting in May 2020, the agency moved from "reactive management" to "informed planning and allocation," which resulted in better service for the provinces and territories, said Hogan.
To address shortages, Public Services and Procurement Canada took a risk by pre-paying for some orders even when they couldn't be sure a supplier would deliver. The department also brought in procurement staff assigned to other files to help purchasing agents close the supply gap.
Hogan said this aggressive approach helped the federal government secure much-needed equipment at a time of unprecedented demand. The AG found the department "awarded contracts relatively quickly."
As CBC News first reported last year, the public servants who manage the NESS warned in early February 2020 that the PPE needed to weather a pandemic was in short supply. It still took weeks for the federal government to sign contracts for goods like N95 respirators — the masks used by health-care professionals to protect themselves from COVID-19.
In a PowerPoint presentation delivered on Feb. 13, bureaucrats responsible for the NESS said that the federal stockpile contained only "a modest supply of personal protective equipment including surgical masks, respirators, gloves, gowns and coveralls."
Documents obtained by CBC show that, despite the warning in February, the government signed few contracts for PPE or other equipment, like ventilators, until mid-March.
In fact, the bureaucrats charged with replenishing the national stockpile didn't receive special dispensation — a national security exemption — to quickly replace supplies through sole-sourced contracts until March 14.
As a result, front-line health care workers were forced to ration and re-use PPE because of serious shortages.
The persistent shortage of masks in March and April prompted the then president of the Canadian Medical Association (CMA), Sandy Buchman, to warn a Senate committee that the country's "sick" health care system was at a "breaking point" because physicians didn't have access to a consistent and adequate supply of protective equipment.
While supply improved over the spring and summer months, a CMA-commissioned poll from September found the country's doctors were still struggling with PPE — 54 per cent of respondents said they experienced challenges when trying to acquire that equipment.
Public Services and Procurement Canada has since purchased 190,640,000 N95 respirators, along with millions of other goods necessary to the fight against COVID-19.
Procurement Minister Anita Anand defended her department's performance Wednesday, saying public servants worked "around the clock" to get the needed equipment "in an era of extreme volatility and tight supply chains."
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