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Health care workers prepare to test passengers as they arrive at Toronto's Pearson airport after mandatory COVID-19 testing took effect for international arrivals on Feb. 1, 2021.CARLOS OSORIO/Reuters

The federal government says it will spend up to $1.2-billion on COVID-19 tests for travellers arriving in Canada, double the amount budgeted two months ago.

Canada announced changes this week to its testing regime for travellers, following concern from the travel industry about the tests’ impact on tourism and feedback from medical experts that some of the screening was no longer needed.

The federal government said it will no longer, as of the end of the month, require fully vaccinated travellers to take molecular tests, such as polymerase chain reaction (PCR) tests, prior to arrival. (Such travellers will instead be able to opt for less expensive rapid tests.) But the government said it will continue random PCR screening of travellers after they arrive at airports or land borders.

The cost of those arrival tests continues to climb. In December, the government said it had earmarked $631-million for the tests, but the number rose to $1.23-billion after more contracts were signed in the following weeks.

The names of the companies who won those contracts have not been posted on the federal government’s main procurement website. Public Services and Procurement Canada says this is because the procurement was done through a national security process. But the department did provide a copy of the tender and some information about the winning bids when asked by The Globe.

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The government divided the work among four companies.

Switch Health, a Toronto-based health care startup, has received the largest share of the work. Its contract, worth up to $740-million, gives it responsibility for conducting testing in Ontario, Alberta and Atlantic Canada until May 31. The company, which has also helped distribute rapid antigen tests, has seen dramatic expansion over the course of the pandemic. It had only a handful of employees two years ago, but its work force now stands at over 600 people, according to LinkedIn data.

LifeLabs, a chain of labs owned by OMERS’s investment arm, is being paid up to $211-million to process tests in British Columbia, Saskatchewan and Yukon until April 30. Omicron outbreaks caused 12 of the company’s B.C. locations to close in January; seven have now reopened. The company said the closings did not affect lab operations, though they did cause increased pressure on the remaining employees.

Dynacare, a testing company owned by U.S.-based Laboratory Corporation of America Holdings, processes tests in Quebec and Manitoba under a contract worth up to $200-million. The company also provides testing services for other government departments, such as Correctional Services.

As of Dec. 21, Biron Groupe Santé, a health company headquartered just outside Montreal, handles some of the testing in Quebec as well, including at the land crossing at Roxham Road, a popular place for asylum seekers to enter the country. The company’s contract is worth $74.8-million and runs to April 30.

The government’s expectations of test volume change depending on the number of travellers that pass through those ports of entry. For example, Switch Health is expected to process up to 38,000 tests a day from the 38 land border crossings it is responsible for, as well as 479 tests per hour at Calgary International Airport and 1,744 tests per hour at Toronto Pearson International Airport.

In total, 805,852 air travellers were tested between Nov. 28, 2021, and Jan. 29, 2022, and 5 per cent of them were positive for the coronavirus, according to federal data. Among land travellers, 120,607 were tested and 6 per cent were positive.

Companies are paid after conducting the tests and are required to submit substantiating documentation to the government to prove the work was done. Public Services and Procurement Canada said the documents are reviewed by the Public Health Agency of Canada before payments are made. The department also said that so far all testing firms have met the conditions of their contracts.

The federal government has said the tests are necessary as part of a surveillance system to monitor the spread of COVID-19 in Canada, although most provinces have already ended widespread public access to testing.

The size of the contracts, and the nature of the procurement, have drawn some criticism.

Zain Chagla, an infectious-diseases physician and associate professor at McMaster University, said the current arrival testing system has not been a cost-effective strategy for either stopping the spread of the Omicron variant or tracking other variants of concern.

He said the resources directed to arrival testing could have been better used to boost testing for vulnerable communities, such as for residents in long-term care homes.

“We really do have to reassess what these contracts are and where this money is going,” Dr. Chagla said. “A billion dollars is a huge amount of cash. It’s an expensive test that we are doing at the border and we have to recognize that this is not without cost.”

NDP MP Taylor Bachrach, his party’s transportation critic, said the New Democrats support the recent changes to testing, including the decision to keep random testing in place for arriving travellers.

However, he said the procurement contracts need to be fully transparent so that Canadians can have confidence that they are getting good value for the money spent.

“We continue to be concerned about pandemic profiteering, so that transparency is of utmost importance,” Mr. Bachrach said.

Companies that received the contracts either did not respond to requests for comment, or declined to reveal specifics about their services.

Mark Bernhardt, manager of corporate communications at Dynacare, said the company has been pleased to work with the government since the summer of 2021.

“We will continue to offer our services as long as there is a need for quality and efficient testing at Canada’s borders,” he said in a statement.

Biron and Switch Health declined to comment. LifeLabs did not respond.

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