‘Critical deficiencies’ with CAE ventilators caused distribution delay

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The distribution of thousands of ventilators was delayed by several months last year when federal officials found what they described as critical deficiencies with a device made by CAE Inc., new documents reveal.

The Montreal manufacturer won a $282.5-million contract in April to produce 10,000 ventilators for delivery in the fall as part of the emergency response to the COVID-19 pandemic. Health Canada initially approved the ventilator in June, but distribution was suspended in July after it “identified concerns” with the machine.

CAE, which usually makes flight-simulator equipment, said in an e-mailed statement on Thursday that the government’s concerns were resolved quickly and Health Canada gave final approval to the device on Sept. 28. The company says it has now manufactured 8,200 units. However, the delay highlights the challenges of medical-supply procurement during the pandemic, as companies offered to retool their manufacturing capacity on the fly to make up for a shortage of key equipment.

Internal records released to Parliament this week show that on Sept. 1, at Health Canada’s request, the Public Health Agency of Canada (PHAC) undertook an independent review of the CAE Air1.

That review, according to a memo, “concluded that the ventilators failed the technical assessment due to critical deficiencies that pose patient safety risks.” The memo notes that “during testing, a number of concerns were raised regarding oxygen delivery, stability and monitoring that could affect patient safety.”

The information is contained in a Sept. 14 memo from PHAC. The memo is part of a large release of government documents in response to a late October motion approved by the House of Commons over the objections of the Liberal government.

The company said some of its devices are now being deployed by PHAC.

“When designing and manufacturing an entirely new device, some adjustments to the first production units is completely normal and expected as part of the development process,” the company said.

“CAE is confident that its CAE Air1 ventilator can be used to create emergency stockpiles in Canada to face emergencies,” it said.

Health Canada spokesperson Tammy Jarbeau said in an e-mail Thursday that the government has accepted ventilators from CAE and that quality checks are performed on all ventilators.

“Health Canada has been collecting and analyzing information regarding quality concerns for the CAE ventilators, including engaging with the company. This engagement is ongoing,” she said.

The contract was part of a federal government pledge to obtain 40,000 made-in-Canada ventilators as part of a “call to action” for Canadian companies to help with the pandemic response.

The government’s $282.5-million order with CAE is the largest of 14 federal contracts for ventilators and accessories, worth just under $1.2-billion in total.

The second largest is $237.3-million to FTI Professional Grade Inc.; followed by $223.7-million to Thornhill Medical; $169.5-million to Canadian Emergency Ventilators Inc. and $136.7-million to EPM Global Services Inc. All five companies are domestic manufacturers. The other nine contracts are all worth less than $20,000 each.

Oppositions MPs outvoted their Liberal counterparts to approve the wide-ranging document production order, even though Public Services and Procurement Minister Anita Anand warned at the time that releasing such information could harm Canada’s negotiated arrangements with medical suppliers.

An initial release of documents in mid-December was largely limited to publicly available news releases and background documents. The second wave of releases, tabled Wednesday, includes documents such as briefing notes and planned media lines from six departments, including Health Canada, the department of Industry, the National Research Council of Canada (NRC), the Privy Council, PHAC, Public Works and Government Services.

CAE worked closely with the NRC, which has said that it provided the company with “advice and scientific expertise” on parts of the ventilator design, and “helped the company select essential design materials, as well as suggested cleaning methods to ensure the safe and proper functioning of key device components.”

In a financial statement for the quarter ended Sept. 30, the company – which trades on the Toronto Stock Exchange and the New York Stock Exchange – reported a $7-million year-over-year increase in revenue from its Healthcare division, “due to the sales of the CAE Air1 ventilators.”

Some of the newly released documents date back to mid-February, providing a glimpse into the thoughts of officials at a time when only a handful of COVID-19 cases had appeared in Canada.

A document titled “Evergreen Media Lines,” dated Feb. 14, 2020, says as of that date, Canada had just seven confirmed cases.

“The risk of spread of this virus within Canada remains low at this time,” says the document under “Key Messages.”

In the same document, a list of questions and responses to potential media questions is provided. One question asks whether Canada will close its borders or start banning flights from China, to which the response is: “No. The Government of Canada and the provinces and territories have multiple systems in place to prepare for, detect, respond to and prevent the spread of infectious diseases in Canada.”

“We also know that China has taken exceptional steps, including exit screening measures, and has cancelled all flights and transportation from Wuhan and other affected cities,” it continued.

Another question asks “Do you recommend travellers wear masks while visiting China or quarantine-blocked cities within the country, such as Wuhan?” The response to that question was also “No.” It said Canadians travelling abroad are encouraged to consult the travel notice for China on the Canadian government’s website.

An early July briefing note for Lisa Landry, director for the Public Health Agency of Canada, shows that at that time, federal officials were not expecting a successful COVID-19 vaccine until the summer of 2021.

“We cannot predict specific timelines and it is unlikely that a vaccine will be ready before August, 2021,” the note states.

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