After a sprint to scale up production of personal protection equipment (PPE), Canadian manufacturers are now focused on developing a sustainable domestic industry while laying the groundwork to compete in international markets.

The global COVID-19 pandemic caught most countries unprepared for the enormous demand for face masks, respirators, medical gloves and gowns. A major issue for countries like Canada was the lack of a domestic PPE industry, which made us reliant on foreign products – not a position you want to be in when there’s a sudden, huge global demand.

Ten months on, there is still a shortage of N95 respirators, nitril gloves and protective gowns – products that are mostly made in Asia. But demand in Canada for face masks, consumer respirators and plastic face shields has eased up, according to members of the growing PPE sector in Waterloo Region.

Waterloo entrepreneur Jeremy Hedges – who pivoted his edtech company in March from 3D printing and laser cutting to making plastic face shields, surgical masks and reusable cloth masks – is using the slight lull to develop new products, improve automation processes and refine his strategy for competing in international PPE markets.

“We’re trying to become a sustainable entity in this space,” says Hedges, founder and CEO of The Canadian Shield. “We’ve started making investments in material production, our own automation systems and becoming globally competitive.”

Back in February, Hedges was focused on running InkSmith Education Technology, a relatively small edtech player. When COVID-19 struck, he used his 3D printing and laser-cutting machines to make what he thought would be a limited run of plastic face shields to help out local health-care workers.

“At that point we thought we were going to make 10,000 face shields and donate them,” he says. “But it ended up that in a month we grew our team by 150 people, made about a million shields, received contracts for 11 million, and opened a 50,000-square-foot facility.”

To meet demand, he launched a new PPE company – The Canadian Shield – and ramped it up with astonishing speed. Hedges’ workforce soared from 10 people to 330 at peak production. By the end of August, the company had made more than 16 million face shields and added surgical and reusable cloth masks to its product line.

The demand in Canada for face shields and masks began to slow down this fall, a trend Hedges attributes to several factors: the stockpiles built up by health-care purchasers following the initial shortages last spring; and the availability of cheaper products made in Asia.

“The real barrier that we face in the short term is we’re an emerging industry in a global commodity market where our labour and operating costs are that of a developed nation,” he says. “And in the meantime, the medical-device purchasing institutions heavily favour overseas products. It’s still fundamentally about costs.”

Hedges says automation is the key to building a sustainable Canadian PPE industry and boosting its competitiveness in export markets.

“Because it is such a high-volume manufacturing process, everything needs to be automated; it has got to have as few touch points as possible,” he says. “(We’re)

working on how we can create not just a supply chain for Canada, but how we can compete dollar for dollar and penny for penny with China. And I think that there’s a really clear roadmap for us... probably call it four to six months away from being able to compete penny for penny for global market share.”

Not only will automated manufacturing bring down costs, Hedges believes that the development of new automation techniques yields intellectual property (IP) that will give his company a competitive advantage in making its own products­ as well as a valuable new commodity – protected IP – to license.

“We’ve got a lot of IP,” he says. “We learned a lot. Shields were a really good test run for us. The technical part of this is going to be big, and we are lucky to be in Waterloo and the supercluster of automation in Ontario.”

Innovation is also a priority for Peter Whitby, co-founder and CEO of respirator-maker O2 Industries in Kitchener.

“You need to make a unique offering and that leads to exports,” he says. “It’s really easy to buy a machine and make face coverings. The key is to innovate and engineer… (design) a new respirator, manufacture that here and export that innovation – sell into America, sell into Europe, so that those revenues come back into Canada.”

Founded in 2014, O2 Industries manufactures a reusable respirator called the O2 Curve. Earlier this week, the company received $1.8 million from the province’s Ontario Together fund to help O2 launch a medical-grade respirator with the safety and practical needs of health-care workers at the forefront of its design.

To date, O2 has had its respirator shells made in China and the disposable filters made in the U.S. It plans to shift that production to Canada in the future. Its new medical-grade respirator, which it plans to launch in the first quarter of 2021, will be manufactured in Barrie, Ont.

“We really want a diversified supply chain and ensure that we can produce here in our backyard,” says Whitby.

There’s a difference between a respirator and a mask. Respirators are designed to protect the wearer from airborne particles, including exposure to biological aerosols such as viruses and bacteria. Masks, on the other hand, are primarily designed to block droplets and fluid spray coming from the wearer and possibly reaching those around them.

The difference helps to explain O2’s efforts to add a medical-grade respirator to its product line. The current standard for respirators in many health-care environments around the world is known as N95, a standard regulated by the National Institute for Occupational Safety and Health (NIOSH) in the U.S.

However, the N95 was originally designed for mining, construction and other dusty industrial environments. Dr. Peter Maric, a family physician and chief medical officer for O2 Industries, sees both a need and a market for a high-quality respirator that is designed specifically for health-care workers.

He and others have been working with Health Canada to create the country’s own standards for respirators that match or exceed the N95 rating. An interim Canadian standard has been set, with efforts under way to approve a final Canadian standard that can then be promoted widely to ensure awareness of and confidence in the Canadian rating.

Maric first encountered O2 Industries earlier this year while trying to source a high-quality, Canadian-made respirator that was suitable for the health-care environment.

“We were really struggling with how we were going to meet the need, and I was really looking for a Canadian solution to that problem,” he says. “Very quickly we realized there was an opportunity and a need to create a made-for-purpose medical respirator because nobody was really doing that at that time. We wanted to very thoughtfully think about… respiratory protection in the medical world that may be different than, for example, construction or mining or agriculture.”

Maric says O2 is focused on addressing three key issues: making effective respirators; producing them in a more cost-effective way; and making them from products that are more environmentally friendly.

Like Jeremy Hedges of The Canadian Shield, Maric and Whitby say O2 is aiming to build up domestic PPE production and supply chains in Canada, while also pursuing opportunities to sell high-quality protective gear in international markets.

“Nine out of 10 people around the world breathe contaminated air every single day,” says Maric. “Air pollution is a huge issue that has a lot of very negative health determinants… and that, unfortunately, is not going away anytime in the near future.”

Meanwhile, on the supply and distribution side, efforts continue to make sure that hospitals, health-care workers and first responders have regular access to Canadian-made PPE products.

“I think we’ve come a long way since February-March,” says Amber French, Managing Partner at Catalyst Capital and Director of Strategic Capital at Communitech. “(But) we can’t be caught again like we were in March where we were so reliant on importing product that just wasn’t there.”

Early in the pandemic, French played a significant role in setting up a Waterloo Region not-for-profit procurement entity called PPE Access. She also worked with entrepreneur David Chilton to create Supply and Protect, an online marketplace that connects Canadian PPE manufacturers and suppliers with hospitals, businesses and individuals looking for PPE.

French says PPE Access and Supply and Protect will be merging their platforms and go forward as a not-for-profit, with plans to expand across Canada.

She also says more work needs to be done to ensure that Canada leverages all the work that has been done in the past 10 months to create a stable, sufficient domestic supply of PPE.

“We have a lot of great Canadian manufacturers who have pivoted and started producing really top-quality PPE,” says French. “I think a lot of those companies are now looking at how they can increase efficiencies within their operations to stay competitive with foreign markets. I think a lot of work needs to be done with the government, in lobbying and policy, to be able to continue to support these Canadian manufacturers.”