Question Period Note: Essential Services Contingency Reserve

The Government of Canada created the Essential Services Contingency Reserve (ESCR) to provide essential services workers with access to personal protective equipment (PPE), non-medical masks and disinfection products to meet urgent, short-term needs.

Public Services and Procurement Canada (PSPC) is implementing changes to the eligibility criteria for the ESCR to increase the number of organizations that may apply and to support targeted groups by providing access to the PPE they need to help keep Canadians safe.

• On August 3, 2020, the Government launched the Essential Services Contingency Reserve to provide essential businesses or organizations, from a variety of sectors, with access to PPE and critical supplies to address urgent, short-term needs and protect front-line workers
  • Since the Contingency Reserve was introduced, a number of organizations have registered to access the inventory and orders have been placed in a variety of essential services sectors. With the current strong Canadian market availability, the need to access an emergency supply of PPE has been addressed for many essential businesses and organizations
  • The Government is looking to support more organizations in other critical areas with access to the key supplies that they need to keep their members and Canadians safe, and is now implementing changes to the eligibility criteria for the ESCR to increase the number of organizations that can access this service
  • This includes no longer requiring businesses in the essential service sectors to demonstrate that they have exhausted all other supply sources.
  • In addition, organizations serving Indigenous communities and organizations in the social service sector may now apply to access PPE and critical supplies at no cost

If pressed on logistics and distribution:

• We have entered into an agreement with Canadian supplier SCI to provide warehousing and order fulfillment across Canada for the ESCR, including in northern and remote communities
• SCI is part of the Canada Post network, offering seamless integration with Purolator and Canada Post for shipping orders to businesses and organizations across essential services sectors

If pressed on contracts issued to operationalize the ESCR:

• Foursuppliers have been engaged to support the delivery of the ESCR
• A task authorization for approximately $3.7 million has been issued to InfoSys Public Services to create a case management system and order intake tool, leveraging work to date on the Electronic Procurement System
• A contract for approximately $3.9 million has been awarded to SCI, a subsidiary of Canada Post, for warehousing and inventory management
• Purolator and Day & Ross, both on the National Master Standing Offer, have been engaged to cover ground transportation for order fulfillment which is expected to cost approximately 2 million dollars

If pressed on supplier types for contracts issued to stock the ESCR:

• To stock the ESCR, Public Services and Procurement Canada is purchasing supplies from a number of sources, both internationally and domestically

If pressed on eligibility for the ESCR:

• Organizations and businesses that require access to a short-term supply of PPE and critical supplies will be able to apply online through the appropriate program stream
• Applications are assessed in 2 steps, including eligibility screening by PSPC, and a more detailed assessment against the application requirements through PSPC or the relevant federal department that oversees the particular sector

If pressed on cost-recovery:

• The cost of goods is established based on the average price paid by PSPC to purchase inventory for the ESCR and does not include overheard costs to acquire and warehouse the inventory
• Costs are reviewed on a regular basis and updated accordingly
• Shipping costs are applied to purchases from the ESCR

If pressed on inventory:

• Inventory in the ESCR evolves due to supply and demand and includes items such as nitrile gloves, non-medical masks, thermometers, face shields, and disposable coveralls
• To date, the ESCR has about $153M worth of goods in inventory
• Efforts are being made to ensure that the inventory aligns with the needs of essential services sectors

There is a 2-step process to access the ESCR:

• Registration
• Order placement

As of May 5, 2021, the ESCR has received a total of 272 requests for registration from the following sectors: Health, Safety, Manufacturing, Information and Communication Technologies, Food, Government, Transportation, Energy and Utilities, Water and Finance sectors. Of the businesses registered, 27 have placed orders. Of those orders, 12 have been cancelled, and 15 approved. A portion of the cancelled orders have been redirected to supply available through provinces and territories.

To date, the ECSR has been mostly accessed by small- and medium-size enterprises rather than consolidated requests from critical sectors. As such, the approval process for orders valued at less than $5,000 has been streamlined to remain within Public Services and Procurement Canada to reduce processing times and ensure timely order fulfillment.

PSPC is implementing changes to the eligibility criteria for the ESCR to increase the number of organizations that may apply, and support targeted groups by providing access to the PPE they need to help keep Canadians safe.

Applications are assessed in two steps, including eligibility screening, and an assessment against the application requirements. During the application process, PSPC conducts initial screening to review the completeness, accuracy, and basic eligibility of applications, before either approving the application or sending it to lead departments to make a recommendation to endorse or reject the application.

Supplementary Estimates B

PSPC sought access to $500 million (in both Vote 1—Operating Expenditures and Statutory Authority) in 2020 to 2021 to establish the ESCR, to which essential service organizations can apply for temporary, urgent access to PPE and other critical supplies.

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