Ontario NDP calls for parliamentary inquiry into $ 80 million sole-source contract for unproven COVID testing devices produced by now insolvent company that hired lobbying firm linked to Premier Doug Ford’s government .
The contract was awarded in March 2020 to Spartan Bioscience under pressure from Wellington Advocacy, which employs several former conservative insiders. As a report by Richard Warnica of The Star reveals, Public Health Ontario agreed to pay Spartan an immediate down payment of $ 10 million upon signing of the contract.
“Doug Ford handed over $ 10 million to a company whose only qualification seems to have been that Ford’s Conservative insiders were on their payroll as lobbyists,” the NDP health spokesperson said, France Gélinas, in a press release.
“Even though the tests Ford bought with Ontarians’ money don’t work, not a penny has been refunded. Ontarians are right to be outraged, because it is always the insiders and lobbyists who get deals from this Prime Minister, while Ontarians pay for it, ”added Gélinas.
A spokesperson for Ontario Health Minister Christine Elliott said the Spartan test kit was intended to support testing capacity in remote and vulnerable populations, reduce test turnaround times and reduce the pressure on healthcare workers.
“As Public Health Ontario did not receive any Spartan COVID-19 laboratory test kits approved by Health Canada due to issues with the product, Public Health Ontario had directly discussed the status of its contract with Spartan Bioscience Inc .. In early April, Spartan Bioscience made a proposal under the Bankruptcy and Insolvency Act, and Public Health Ontario, as a creditor, is participating in this process, ”said Alexandra Hilkene.
After several repeated and ad hoc approvals from Health Canada for Spartan’s COVID testing device, Spartan filed for creditors protection in April. He owed just under $ 73 million.
As the Star reports, the company has put 60 of its 80 employees and 11 co-op students on leave to prevent its cash flow from running out, as part of an insolvency proceeding. In a list of creditors filed in the proceedings, Public Health Ontario was the company’s second-largest creditors, with Spartan still owing the government agency $ 9.8 million of its initial $ 10 million deposit. .
Casa-Dea Finance Ltd., one of the company’s other major creditors, is seeking court approval to buy Spartan.
Public Health Ontario is one of several unsecured creditors. Casa-Dea is listed as one of the four secured creditors. In the event of the sale of an insolvent business or its assets, secured creditors have first access to the proceeds of the sale.
Public Health Ontario was ordered by the provincial Ministry of Health on March 25, 2020 to sign a contract with Spartan “as soon as possible”. A day later, they signed. Last November, after the province’s auditor general reviewed the agreement, Public Health Ontario requested reimbursement of the $ 10 million.