The Ontario NDP is calling for a parliamentary investigation into an $80-million, sole-sourced contract for unproven COVID testing devices produced by a now-insolvent company that hired a lobbying firm with ties to the government of Premier Doug Ford.
The contract was awarded in March 2020 to Spartan Bioscience after pressure from Wellington Advocacy, which employs several former conservative insiders. As revealed in a report by the Star’s Richard Warnica, Public Health Ontario agreed to pay Spartan an immediate $10-million deposit upon signing the contract.
“Doug Ford handed $10 million to a company whose only qualification seems to have been that Ford Conservative insiders were on their payroll as lobbyists,” said NDP health critic France Gélinas in a press release.
“Even though the tests Ford bought with Ontarians’ cash don’t work, not a cent has been paid back. Ontarians are right to be outraged over this, because it’s always insiders and lobbyists who get deals from this premier, while the people of Ontario pay for it,” Gélinas added.
A spokesperson for Ontario Health Minister Christine Elliott said the Spartan test kit was intended to support testing capacity in remote and vulnerable populations, decrease test turnaround times, and reduce the pressure on health-care workers.
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“As Public Health Ontario did not receive any Health Canada-approved Spartan COVID-19 laboratory test kits due to issues with the product, Public Health Ontario had been discussing the status of its contract with Spartan Bioscience Inc. directly. Spartan Bioscience in early April made a proposal under the Bankruptcy and Insolvency Act, and Public Health Ontario, as a creditor, is participating in that process,” said Alexandra Hilkene.
After several on-again, off-again Health Canada approvals for Spartan’s COVID-testing device, Spartan filed for protection from creditors this April. It owed just under $73 million.
As reported by the Star, the company furloughed 60 of its 80 employees and 11 co-op students to keep what cash flow it had from draining away, as part of insolvency proceedings. In a list of creditors filed as part of the proceedings, Public Health Ontario was listed as the company’s second-biggest creditor, 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 among several unsecured creditors. Casa-Dea is listed as one of just four secured creditors. In the event of a sale of an insolvent company or its assets, secured creditors have first dibs on the proceeds.
Public Health Ontario had been directed 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 deal was reviewed by the provincial auditor general, Public Health Ontario asked to get the $10 million back.
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