I will call this meeting to order. This is meeting number 19 of the Standing Committee on Government Operations and Estimates.
I have a couple of housekeeping notes before we get going. Number one, colleagues, is that I'll be asking to take about 10 minutes at the end of the second hour to discuss future business of this committee.
Second, we have two witnesses in each of the first and second hours. We've asked them to deliver opening statements of no more than five minutes. I will be enforcing that, if need be, because we are very tight for time.
Also, witnesses, if you are speaking in one official language, I would ask you to maintain that official language for your entire statement or if you're answering a question. If a question is posed to you en français and you wish to respond in French, do so for the entire answer. Switching back and forth between two languages causes some problems for us technically, so I would ask you to accommodate us and accommodate the interpreters. Last of all, just speak slowly and clearly so that our interpreters will be able to get the correct interpretation to all of our colleagues on this call.
We will be having a five-minute round, a four-minute round and a two-minute round to be able to facilitate the opening statements, and we will begin those now with Mr. McCauley for five minutes.
Thank you to the chair and to committee members for inviting me to join you today.
I would like to start by taking a few minutes to update you on how Canada Post has been responding during COVID-19.
Our people proudly serve all corners of the country—the urban centres, the rural towns, remote communities and the far north. Across the company, we understand the important role we play in the everyday lives of Canadians. When those everyday lives were quickly disrupted as the country responded to COVID-19, we understood we would be playing an essential role in keeping people and businesses connected.
Our top priority from the beginning has been to ensure that we are putting the safety of our people first. To do so, we have closely followed the advice and guidance of the Public Health Agency of Canada throughout the period.
We quickly and dramatically changed the way we work, the way we deliver, the way we operate our post offices and the way we clean our facilities right across the country. Let me give you some examples of changes we made in very short order.
We implemented physical distancing measures in all facilities, many of which weren't designed to keep people two metres apart. In our plants and depots we've made changes to staff scheduling, work layouts and work practices to help keep employees at least two metres apart. In our post offices, we've added plastic shields and signage on doors and floors to ensure customers follow physical distancing. For delivery we moved to a knock-drop-and-go policy for parcel delivery to eliminate the need for customer interactions at the door. We've increased the frequency and the level of cleaning in our facilities, and we've distributed personal protective equipment and safety supplies to employees across our network while placing increased focus on proper hand hygiene and physical distancing.
These are just some of the examples of the many measures we've taken in response to COVID-19 across our 21 plants, 480 depots and thousands of post offices.
Through it all we've worked closely with our unions and bargaining agents at the national and local level, with a shared focus on keeping our people safe. We have met regularly, daily, shared ideas and information, and addressed potential concerns.
This approach has helped us to quickly navigate many of the challenges we face while we continue to operate in these challenging times. By putting safety measures in place early and working to regularly improve them, we have been able to continue operating as Canadians turn to us to deliver more and more items.
In April, May and now June, we've seen a huge increase in parcel volumes. Our people have been delivering at record levels as Canadians shop online for the items they want and need. These parcel volumes are coming from businesses of all sizes, with many small and medium-sized enterprises shifting to online sales to continue serving their customers.
We are now regularly delivering over one million parcels a day across the country. That's what we normally deliver during the period from Cyber Monday to Christmas. We're also delivering on weekends across the country.
Even with record numbers of parcels going out for delivery, even greater numbers arrive for processing each day. Beyond delivering on weekends, we're taking a number of measures to respond while maintaining physical distancing. Our network is the largest in the country, so let me help put our efforts in perspective by talking about what we're doing in Montreal.
We're processing 24-7, offering voluntary overtime to employees, and drawing on trained temporary workers to come and help out. On average our employees, since this started, have been performing approximately 15,000 hours a week in Montreal in voluntary overtime. We're also hiring new temporary and permanent employees to bring greater stability and to cover all shifts available on the equipment.
We've also continued to make changes to streamline our sorting processes and work with customers to help us use our network more efficiently. It has meant that through May and the first week of June, we've processed more than double the number of parcels we would normally receive at this time of year.
We will continue to respond to improve the situation, but I want to tell this committee that we are incredibly proud of the work our people are doing across the country under very difficult circumstances and we won't undermine the measures we've taken to put employees' safety first.
At Canada Post we're proud to serve all Canadians. While we're being tested by today's current realities, we are the only one built to serve all 16.5 million addresses across this vast country. That's a big reason why we see the majority of what Canadians buy online. It also means we're not just delivering online shopping to urban centres. Canada Post is also busy delivering much-needed supplies to communities across the country, including remote communities in the Far North.
In early April when we, along with Purolator, were called upon to help distribute PPE to provincial and territorial health organizations across the country, we were pleased to support the effort. Our people are part of the communities they serve and they see the need first-hand. Our focus at Canada Post has been to keep them safe so that Canadians in every community can continue to count on our postal service.
Thank you. I look forward to our discussion.
Good morning. Thank you, Chair and committee, for inviting Purolator to join you today.
My name is Ryan Persad. I am Purolator's director of global supply chain solutions. I am pleased to discuss Purolator's role in delivering personal protective equipment, or PPE, to regional health authorities across Canada.
I'll begin with some brief background on Purolator. We are the largest express courier company in Canada. We are celebrating our 60th anniversary as a great Canadian company this year. Our network is made up of more than 170 operating facilities and 110 retail centres. We employ more than 12,000 hard-working Canadians from coast to coast. We have close to 5,500 vehicles in our fleet. I am proud to say that Purolator has one of the greenest fleets in Canada, with a large and growing fleet of electric and hybrid vehicles.
During the past few months, Purolator has been proudly carrying out our mission of making Canada stronger by providing essential delivery services to Canadians across the country. In addition to critical health care, industrial and government shipments, the rise of direct-to-home deliveries has grown substantially over the past few months. I'm proud to say that Purolator delivered tens of millions of shipments to individuals and families, allowing them to safely remain at home during the COVID-19 pandemic.
We did it with safety as our driving priority. Our more than 12,000 employees have been on the front line, delivering vital supplies every day, ensuring that the economy continued to move and critical supply chains continued to flow. We have been working closely with public health organizations and global occupational health experts to execute safety protocols to help ensure that our employees and customers stay safe. We put in place advanced sanitation practices and increased the frequency of sanitizing all facilities. We're conducting contactless deliveries through our retail store and courier networks.
In my role, I'm responsible for working with large organizations and creating supply chain solutions to, from and within Canada. Purolator's network and our service are designed for safety, speed and reliability. We have broad capabilities to deliver all types of shipments, from truckloads of freight to documents and parcels. We also have warehousing, logistics and customs brokerage capabilities to enable our thousands of global customers doing business in Canada.
We were proud to work with our partners involved in the role of delivering much-needed PPE to regional health authorities across the country. To date we've delivered more than 33,000 cartons of equipment, including masks, gloves and gowns. They were delivered to regional authorities in every province, to 14 locations in total.
As provinces and territories move to reopen, we will continue to put safety first for Canadians and our employees, and do everything we can to serve the millions of Canadians and businesses who are relying on us to deliver their promises during these unprecedented times.
I would be pleased to answer any questions you may have about Purolator's role in delivering PPE supplies to the regional health authorities.
Witnesses, thanks very much for joining us today and for your information.
Before I get to my questions, I want to start with a shout-out to some folks at Canada Post. In Edmonton West a short while ago, we celebrated the 100th anniversary of a World War II veteran and one of our local heroes, Leslie McLean, who served in the Atlantic battle. Donald Cooper from Canada Post, who has helped us out a lot on our mailbox issues, came all the way up to help celebrate the birthday. Doug Ettinger, the Canada Post president, provided for us a special memento for Mr. McLean, who had spent 35 years working for Canada Post after leaving the armed services. I wanted to give a quick thanks to Canada Post for that.
Ms. Fortin, I hear there are various service delays because of the safety measures of physical distancing at your plants. Can you help me understand what's involved? What specifically would be causing the delays?
Thank you for the comments about our employees. I know Donald Cooper as I worked in the Prairie region in the past. He's a very good employee and so pleased that he was able to help you with your event.
From the start, our top priority has been to keep our people and the communities they serve safe. We had, in very short order, to make several changes in our operations across the country, of course working closely with our unions and with our employees to put those changes in under public health guidance of what those measures should look like.
At the same time as we were putting those measures in place, we started to get incoming volumes that were similar to Christmas. The measures we put in place are necessary. They include things like changing our work layouts in all of our facilities, facilities that were not built to have people two metres apart. We had to change our layouts and our work practices. We had to reduce the number of employees working in several work centres in order to respect the two-metre distance. All of those changes have caused us to have less processing capacity than we typically would have at Christmas with the benefit of planning and the physical distancing measures not in place.
Under the COVID staffing, our employees are processing record numbers, Christmas volume numbers, but we can expect some delays as we put some of those safety measures in place and we keep those safety measures in place. We've suspended normal delivery guarantees for parcels because we wanted to focus on safety. We've been very transparent with customers, posting information on the delays on our website and on social media and also letting the customers who are sending the parcels to the consumers, Canadian citizens, know. We've been transparent with Canadians to expect delays for the foreseeable future.
We've delivered every single weekend since March 12. We are not structured to deliver, but our employees showed up. Hundreds of employees showed up to deliver every weekend. We've been operating 24-7. We don't typically, in April, May and June, operate 24-7. We've called on our 10,000 temporary employees to come and help us out. We've had over 600,000 hours of overtime in all of our plants from our employees helping us over weekends.
We're creating now full-time positions in some of the bigger facilities to help deal with the volumes, but essentially we've delivered Christmas-type volumes with a capacity that has been constrained for all the right reasons, to ensure that the proper safety measures are in place in our facilities.
Thank you, witnesses.
I'd like to echo the sentiments on the great work that the postal service is doing, making sure that we receive not only the goods but the services that we need.
Let's take a step back. Madam Fortin and Mr. Persad, can you give us, very quickly, an overview of the process of the distribution of the PPE? I understand we do some sourcing. I understand that through PSPC we do the procurement, but once the procurement is done and the goods are sourced, help us, very quickly, through the steps we do to get the product from the destination to the regional health centre.
Thank you for your kind words about the work that our employees are doing every day to serve Canadians.
Maybe I can answer the question by explaining a bit what our roles have been in this initial and urgent distribution of personal protective equipment.
Each entity had its own role to play, for sure. Amazon was brought in to provide the system platform to enable PHAC to place orders, track orders, track inventory and then give a signal that an order needed to be dispatched. We could not do that ourselves, because we're not a fulfillment company—we're a processing, transportation and delivery company—and so that was Amazon's role.
Purolator—and Ryan can probably add to this after—is providing transportation to the Maritime-Ontario warehouse to await shipment instructions and is also providing the final-mile shipping services to the 14 health organizations across the country.
Canada Post is also providing final last-mile shipping services in some instances.
Maritime-Ontario, which is a contractor of Canada Post, has provided an emergency warehouse solution to store the product and—
My first question is for you, Ms. Fortin. You say you got 10,000 temporary employees back. I thank you for that, because one of my concerns was whether, during the crisis, these employees had been fired. You say you called them back and now you have 60,000 employees. I'm glad to hear they're protected too.
The volume of parcels you handle is greater, but is the type of parcels different than usual?
That's a very good question, because there has indeed been a change in the kind of packages we handle.
Under normal circumstances, we process and deliver 700,000 to 800,000 items per day. We currently process and deliver between 1.5 million and 2 million items per day.
Usually 60% of the items are small packages, for example, a sweater ordered from Simons. The remaining 40% are larger packages, such as an Apple computer, that don't fit in a mailman's bag. However, we have seen big changes in the type of packages.
This is because right now, since people only have the option to order online, they order more items from the same supplier. So we've seen the size of the packages increase. There are fewer small ones, more big ones, and many more oversized packages, like canoes. We are not equipped for that. Our operations are designed to handle a lot of small parcels, 40% regular parcels, and perhaps 1% oversized parcels.
I really feel compelled to begin my time by stating my deep disappointment that Amazon was unable to find time to join us in this committee.
We know certainly the consternation around the contract, how it was communicated, how it evolved and some of the gaps in the answers we received in previous committee meetings.
I have to share with you that during this pandemic I've had an opportunity to look into our standing orders. Quite frankly, under Standing Order 113(5) and 113(6), I'm reminded that standing committees have the power to send for persons, with no limitations noted in the applicable standing orders of Standing Order 108.
I share that because as we go into the summer months I feel that we ought to have really strongly urged Amazon to find time to be here. I'm very disappointed, if not a bit upset, that they couldn't make time, given their relationship with this government.
I'll begin with my questions to Canada Post.
I will also note that their fatigue in the work they do is very challenging and very difficult. I do want to acknowledge that.
On April 24, 2020, the told the committee that Amazon Canada was selected to distribute medical supplies because it responded to PSPC's call to action. In response to a question from a committee member, she further explained that the federal government selected Amazon Canada because, unlike Canada Post, it has an online platform through which provinces and territories can place orders for medical equipment and supplies.
I think we heard earlier in this committee Mr. Jowhari suggest that Canada Post brought on Amazon. We know that not to be true.
Did Canada Post and Purolator respond to this call to action independent of Amazon?
Thank you very much, Mr. Chair.
The last question that was asked concerned small and medium-sized enterprises, which is timely. I've been following what's been said in the media lately. On May 20, an article in La Tribune talked about a local entrepreneur who wanted to sell his goods. He noted that he had to pay between $7, $11 and $12, whereas, for the same package, a Chinese man had to pay less than $1 to send it here.
I'd like to know how that can be explained. There's distance, an ocean to cross and customs to clear. In addition, as you said, you offer assistance to SMEs.
I will reconvene the meeting now.
Colleagues, just a reminder that I need 10 minutes at the end of this meeting to go over some business, so I do not think we'll be able to get a complete round of questions in, but we'll go as far as we can.
We'll start with five-minute opening comments by our witnesses.
Mr. Gentès, you've got five minutes, please.
Unfortunately, Mr. Gentès, we cannot hear you. There is no audio coming through.
Oh, sorry. I did mute myself.
My name is Jean-Philippe Gentès. I'm a pharmacist by trade. I am also a pharmaceutical entrepreneur. Since 2006, I've been the owner and operator of three businesses that employ 210 people. All businesses are located in Saint-Hyacinthe, Quebec, Canada.
I am in the field of pharmaceutical chemical distribution and importation of materials and medical devices, and I also now manufacture hand sanitizers. I also own a compounding pharmacy from which we service pharmacies throughout the province of Quebec and hospitals throughout Canada. We prepare ready-to-use drugs for them that the pharmaceutical industry cannot manufacture, for various reasons. I am also in the field of injectable drugs and biological injectable drug manufacturing.
I would say that COVID-19 put a lot of pressure on the supply chain and the manufacturers of medical supplies and drugs. When it comes to medical devices, glove deliveries from regular manufacturers have been constantly delayed and pushed back. Also, we've seen important price increases in most of the personal protective equipment in the past few months. I would say it's something ranging from 25% to 200%.
Although we've seen good intentions and a nice opportunity given by the Canadian government to allow more manufacturing of hand sanitizers, I would say that a lot of those companies out there are not from the pharmaceutical world. Thus, today they are not respecting the basic regulations on natural product manufacturing. I think this could lead to poor quality and substandard product being available on the market that could cause certain risks to Canadians.
I'd also like to take some time to raise a concern about the technical-grade alcohol that is being used today in the manufacture of certain hand sanitizers available on the market. As the committee might know, technical-grade alcohol contains a lot of impurities, higher than the normal acceptable grade of alcohol that is being used for the manufacturing of hand sanitizers. Sometimes we're talking about 100 times over the regular grade. I'm thinking mainly about acetaldehyde. This has been evaluated by a task force from Health Canada. Despite the fact they're looking at the worst-case scenario, they say the concentration of acetaldehyde that is present in the product can increase the cancer risk from both dermal and inhalation exposure when applying hand sanitizers, and this should not be considered negligible.
Basically, they consider that the risk for the short term is okay under the COVID-19 circumstances, but today I would say that with the pandemic coming more and more under control, there should be a reconsideration of this policy. Although price-wise I think there's an incentive for manufacturing to use technical-grade alcohol—because it sells for one-third to one-half of the price of the acceptable pharmaceutical grade ethanol—I think the low price of technical-grade alcohol should not be a justification to continue using such a product.
Also, I'd like to take some time to discuss manufacturing sustainability.
I think that COVID-19 was a big eye-opener for all of us. During the past years, we lost a considerable number of manufacturing sites in Canada in the health care environment. Long-term lowest-bidder policies have had several important side effects on the health of our manufacturing system. Low prices encourage the use of product manufactured outside of Canada, where labour is cheaper and where quality could not always be at the same level as Canadian standards. Is it normal to pay more for a bottle of water than an injectable dose of a vital product? Is it normal that we pay more for Smarties than pills?
I think the lowest-bidder strategy led to decreasing product quality, lower investment in plant equipment and quality, and plant closures. This had important side effects—
My name is Ernie Philip. I'm the president of Medline Canada.
I'm actually glad to hear the passion of the committee; I'm also personally passionate about this topic. On behalf of our 500 employees, whom I am so very proud of and want to thank, I really appreciate the time of this committee.
At Medline, our passion for purpose is together improving lives. We know that the items we provide to Canadians have a direct impact on people's health.
For context, Medline Canada is an approximately half-billion dollar company, which makes us one of the largest medical supply companies in Canada. We sell Medline-branded products, as well as other manufactured products, through the entire continuum of care: hospitals, long-term care communities, physician and dental offices, as well as two retail stores, one located in Quebec and one located in Ontario.
We can deliver very quickly through our distribution network of warehouses located in Delta, B.C.; Edmonton; Winnipeg; Halifax; Newfoundland; as well as two in Ontario and two in Quebec. We sell tens of thousands of items, including PPE items like gowns, gloves, masks and sanitizers. We also sell items in a number of other large product categories, like incontinence products, skin and wound care products, and sterile procedure trays, as a few examples.
We source products through our manufacturing and contract manufacturing network throughout the world. For example, in Asia we have approximately 600 contracted factories, and we have approximately 350 employees on the ground doing quality and regulatory functions.
We also have access to the manufacturing capabilities of Medline Industries in the United States and in Mexico, and we have many, many relationships with factories right here in Canada.
We work with, and are so appreciative of the work we have done with, the GPOs, the SSOs, the regional health authorities and numerous other government agencies, including those in the federal government, to source incremental PPE items.
I'm very proud of our company. We have, for example, taken a very long-term view of the market. We are a health care company, and during the beginning of COVID-19, our “together improving lives” morals and values were what guided us. We didn't divert products to higher-margin commercial companies like banks; we took our inventory and allocated it directly to front-line workers in hospitals and long-term care facilities, and we tried to be a strong voice, telling our customers to be very careful of short-term brokers, in some cases lawyers, who were in this for short-term profit, asking for large deposits and potentially not being heard from again. We were that constant voice.
We are not in this for short-term profit. We're here, together, to improve the lives of Canadians.
We're really hoping that through this, all levels of government will have a long memory of those companies and industries that lived these values and morals. I certainly would not proclaim that we are a company that's perfect, but we will continue to be vulnerable; we will continue to be honest and we will continue to learn and get better as a company.
I appreciate everybody's time. Thank you.
Good morning, Mr. Philip and Mr. Gentès. I welcome you to the committee this morning. Congratulations on your successes in your businesses.
Mr. Philip, you have 500 employees and 600 contract factories in Asia. This is a lot of capacity. It's a big company.
Have you looked into starting to produce more in Canada now or in the past? Have you thought about producing more in Canada just to maintain quality control? You mentioned that you have about 300 people on the ground trying to track down the product and make sure the quality control is in place and so forth, which is a normal practice for respectful companies bringing product into Canada, especially in the medical field.
Are you looking into expanding further in manufacturing—basically self-reliance—in Canada, rather than bringing product from outside?
It is interesting to note the open-mindedness that the COVID-19 pandemic has brought about in the population. The crisis has also changed the government's view of the security of supply, including the supply of drugs and protective equipment. I think we've taken a big step forward.
As a company, we can choose to focus on our local manufacturers and rely on the security of our drug supply. We will then have to be aware that we will pay more for these products. If that is the societal choice we make as Canadians today, I see a very bright future for these kinds of companies in this country, many of which have been relocated to Asia because of the costs.
In my company's case, the crisis has created opportunities. So we started to produce hydroalcoholic gel, a vein that we had never thought of exploiting in recent years. This new production allowed us to avoid layoffs and remain self-sufficient, since we did not need government assistance programs. This production also allowed us to offset losses in other sectors caused by the COVID-19 pandemic, including the drop in activity in the hospital sector due to the cancellation of many surgical procedures. Like any good entrepreneur, we saw a good opportunity and made a good decision.
Currently, for our hydroalcoholic gel, we use ethanol instead of isopropyl alcohol. On the other hand, we also buy isopropyl alcohol and have had to turn to new suppliers.
When it comes to ethanol, we have multiple sources of supply. We try as much as possible to encourage local suppliers. We have started to do business with a new distillery that opened up. We bought their first 10,000 litres of ethanol. It cost us a lot more, but I think it's important to encourage local production.
Today, unfortunately, it is a hybrid supply from Canada, Asia and Brazil. We are trying to get ethanol of acceptable quality. We have chosen not to use technical alcohol, even when Health Canada has allowed it.
Colleagues, I will not suspend. I will go directly into our discussion on committee future business. I will remind all committee members that we are in public.
Just to recap some of the comments I made at our last meeting, I would like to try to determine in the next few minutes, if possible, what our course of future business will be. If you recall, we are scheduled to discuss supplementary estimates (A) next Tuesday for two hours. Next Friday, June 19, we are free. We do not have witnesses scheduled. However, the whips have agreed that committees will have the authority to meet throughout the summer, should they wish. Secondly, those committees do not have to discuss only COVID-19 related events; they are free to pursue whatever topic of discussion they wish.
My question to all of you on the committee is, what are your wishes? Do you desire to meet throughout the summer months? Or do you wish to suspend and come back in our normal parliamentary schedule, which will be sometime in late September? I can assure you that I have talked to a number of colleagues—on both sides of the aisle, frankly—who have suggested that they would like to take some time off during the summer. I know of only one committee that plans to work its regular committee hours throughout the summer.
That's what the purpose of this discussion is: to find out where we go from here. As your committee chair, I'm completely within your powers to determine our schedule. I see that Mr. McCauley has his hand up first, so I'll go to him, but if anyone wishes to join in on this discussion to see if we can come to a resolution, I would appreciate it greatly.
Mr. McCauley, why don't you start us off?
There are two things. Part of it is that, one, I'd like to add just one more meeting to the current round to bring in the Information Commissioner. There's a new transparency accountability group to talk about the issues of transparency, difficulty with the ATIPs, etc.
For the summer months, after talking to Conservative colleagues, I think we would like to have maybe one meeting in July and one in August for more of an update on PPE procurement, unless some emergency comes up, of course, maybe in the same weeks as the July and August sittings, but again, that's just to have an update from PSPC on the procurement file.
I don't have a problem with our sitting through the summer.
I know we won't be able to do it from June 23 to July 3 because of a technical update, if memory serves me right.
There are various options. We could meet twice a week until July 10 and meet again after that, or we could do what Mr. MacCauley proposes, which is to meet twice in the summer.
I am thinking especially of the work of the clerks, analysts and interpreters, which is gigantic. I want everyone to have good working conditions this summer. So I'm open to Mr. MacCauley's proposal, or to something else.
I see no other hands raised.
What we have then, colleagues, in front of us is two separate proposals, if I am interpreting things correctly. Mr. McCauley has suggested that next Friday, June 19, we would bring the Information Commissioner and other witnesses to meet in our regularly scheduled time.
Furthermore the second proposal would be that we have two additional meetings sometime during the summer, dates yet to be determined, that would be in alignment with the special sittings of the COVID-19 committee in July and August. We can wait until we find out exactly what weeks or what days that committee will be sitting in both July and August, and we can then recall this committee to meet sometime within a day or two of those sessions to try to maximize the efficiency of having the parliamentary sitting and our committee.
Mr. Clerk, I believe those are the two proposals we have.
I also believe we have to have a recorded division on both of them. I wonder if you can take those comments, suggestions that we've just heard, formulate them into some form of a cohesive proposal or motion and allow us to record the votes on both.
First of all, Ms. Romanado wanted to intervene.
Also, as a clarification, the special committee COVI will cease to exist on the 17 June. The sittings that Mr. McCauley was referring to during the summer I believe were actually sittings of the House of Commons.
One option could be—and my apologies, Ms. Romanado, but I will just finish—for the committee to agree to have one meeting in July and one meeting in August to be scheduled by the chair. Then we can figure out the best dates, but that is just an option the committee may want to consider.