Makers of COVID-19 protective equipment seek over $5 billion in damages from Ottawa

Canadian manufacturers of masks and other equipment for protecting against COVID-19 are seeking more than $5 billion in damages from the federal government, saying Ottawa misled them about buying and helping to sell their products.

In a statement of claim filed in Federal Court, the companies and their industry association allege the government made «negligent misrepresentations» that prompted them to invest in personal protection equipment innovations, manufacturing and production.

The companies and the Canadian Association of PPE Manufacturers say the government made misleading statements about markets, direct assistance, flexible procurement and long-term support over a three-year period that began in March 2020.

The federal government will have an opportunity to file a defence to the unproven allegations as the court case proceeds.

The emergence of COVID-19 in early 2020 spurred governments and public-health officials to implement extraordinary measures — including lockdowns, vaccine requirements and mask mandates — to prevent the spread of the disease.

The companies and their association say they formed a «special relationship» with the government that gave rise to a duty of care to the small- and medium-size businesses that swiftly retooled to make protective equipment for Canadians.

«This promise came from the very top of our Canadian government and was supported and propagated through all the departments that dealt with the plaintiffs,» the statement of claim says.

Claimants seeking over $5B in damages

The claim alleges Canada's misrepresentations resulted in about $88 million in investment losses and a further $5.4 billion in projected lost market opportunities over a 10-year period.

The government communicated to the