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An international supply crunch and concerns with defective equipment are being blamed for Canada having to slash its order of N95 respirator masks by almost 50 million in the past two weeks – and only a fraction of the masks received have met health standards.

On May 1, the government said it had orders placed for 154.4 million N95s. That number dropped to 135.6 million on May 8, and was cut again Friday to 104.6 million, according to a federal source.

The Globe and Mail is not identifying the source because they were not authorized to speak publicly on the matter.

Receiving usable masks is also turning into a serious challenge. According to a government update released Saturday, only 1.7 million of the 11.5 million N95 respirator masks the government has received have passed quality control, and Canada has not received any new N95 masks in shipments in the past week.

The dramatic decline in orders isn’t due to demand drying up, the government said. Instead, it’s because suppliers have cut expectations for how much of the vital gear they can source and because Ottawa has suspended orders from suppliers that have shipped faulty equipment.

The cut to orders is not a surprise to experts, who say it’s a direct result of Canada being at the mercy of international supply chains for critical personal protective equipment (PPE) during the COVID-19 pandemic. But they add that it could have been avoided had governments learned the lessons of past pandemics, such as SARS, and adequately stockpiled supplies and secured domestic supply chains.

In a statement, Public Services and Procurement Minister Anita Anand noted that the large order of N95 respirator masks is meant to serve Canada’s long- and short-term needs.

“The size of our orders reflects the fluidity of highly competitive global supply chains. This reality means that some contracts will need to be modified,” Ms. Anand said.

Due to worldwide shortages of N95 respirator masks and other PPE, Ottawa has been placing bulk purchase orders for the equipment since March on behalf of the federal government and provinces and territories. The hope was that the bigger orders would make it easier to secure supplies. The progress Ottawa makes buying and receiving the material is detailed weekly on a federal website.

Bill Matthews, the top civil servant responsible for Public Services and Procurement Canada, told the House of Commons government operations and estimates committee on Friday that the N95 respirator masks are “probably the most important piece of equipment, PPE, we can purchase." And until last week, it appeared the government was making headway in sourcing the vital gear.

On May 8, the government said it had received 11.5 million N95 respirator masks. But that same day, Ms. Anand’s office confirmed that the vast majority of those masks were faulty and couldn’t be used as N95s.

The Canadian Press first reported on the defective masks, which were made in China and procured through a supplier in Montreal. The supplier had provided 11 million of the N95s Canada received, and roughly 9.8 million of those masks did not pass testing, according to the government’s Saturday update. That number is up from the 8 million faulty N95s it reported on May 8.

The government says some of the failed respirator masks are being used in non-medical settings instead.

The defective respirator masks forced the government to suspend its orders with the Montreal company, and are the main reason why Canada’s confirmed orders were cut this week, the source said. In the first week of May, the orders for N95s dropped by 18.8 million; this week, they dropped a further 31 million.

“We are absolutely searching for N95 supply," Mr. Matthews told the committee Friday. The committee was discussing the procurement of PPE and the federally managed National Emergency Strategic Stockpile, but the issue of the slashed orders of N95s was not raised by any witnesses or committee members.

Most of Canada’s PPE supply is still coming from China, Mr. Matthews told the committee. But efforts are already under way to manufacture the gear domestically so that the country becomes less reliant on what Deputy Prime Minister Chrystia Freeland has described as a “wild west” international market.

Given the “massive stress” on the supply chain, Mahesh Nagarajan, chair of the operations and logistics division at the University of British Columbia’s Sauder School of Business, said he isn’t surprised by the cancelled orders. The spike in demand, he said, has opened the door to many more companies in the market, meaning governments are now dealing with unfamiliar sources and may not even know the primary source of its supplies because intermediaries are involved in securing supplies.

The absence of long-term relationships with the suppliers, and the competitive market, also make enforcing contractual obligations much more difficult, Prof. Nagarajan said.

The Globe has previously reported that the federal stockpile, which is supposed to act as an insurance policy for provinces, was inadequately stocked. Had adequate supplies been stocked in advance and domestic supply chains secured, as previous reports have recommended, “we could have avoided this,” said Wesley Wark, a national-security expert and associate professor at the University of Ottawa.

“It’s unfortunate and we’re partly responsible for being in the situation we’re in."

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