Canada didn’t invoke dispute clause when Chinese vaccine deal fell apart, documents reveal

‘The experience … demonstrates once again that any collaboration with China can be jeopardized by Chinese authorities with malign intent towards Canada’

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Canada’s contract to work with a Chinese drug company on its COVID-19 vaccine included an arbitration process for resolving disputes, but as the deal fell apart last year, the National Research Council never used the provision.


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The “collaborative research agreement” between the NRC and CanSino Biologics, obtained by the National Post through an access-to-information request, gave both sides the right to ask for binding arbitration, while barring court litigation to settle disagreements.

One expert says the NRC should have gone to arbitration when Chinese customs officials refused to allow samples of the vaccine to be sent here last year – if only to make a point.

“Why did Canada stand idly by when CanSino breached the agreement?” said Amir Attaran, a law professor and health-policy expert at the University of Ottawa.

“We could have sued them, basically, which would have put Beijing in a tough spot to explain its obstruction.  That would have been worth doing for reasons of accountability, even if we concluded the vaccine was not a very good one.”


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But a spokeswoman for the NRC said it had no dispute with CanSino itself, which was prepared to provide vaccine to Canada.

“After some time it became clear CanSino could not secure the authority to ship the materials to Canada,” she said. “The shipment delays did not constitute a termination of the agreement with cause by CanSino.”

Another outside expert agreed, saying the Chinese government – as opposed to the company – stopped the vaccine export and it was not a party to the deal.

The vaccine was actually developed jointly with the Academy of Military Medical Sciences, part of China’s People’s Liberation Army, and an army major general was reportedly the lead researcher. But with only CanSino and the NRC listed as parties, that wouldn’t have made a difference in arbitration, said Margaret McCuaig-Johnston, a former senior government official who helped manage scientific links with China.


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What’s more, other parts of the contract say neither party is liable for problems caused by factors beyond their reasonable control, she noted.

What happened, though, does underscore why research relationships with Chinese entities can be fraught with risk, said McCuaig-Johnston, a senior fellow at the University of Ottawa’s Institute for Science, Society and Policy.

“The experience of this partnership demonstrates once again that any collaboration with China can be jeopardized by Chinese authorities with malign intent towards Canada,” she said.

“It therefore renders all partnerships with China as inherently unreliable. Certainly in this case, Beijing is fully to blame.”

The arrangement with CanSino would have seen Canada conduct phase one and possibly later trials on the company’s vaccine, then manufacture it at an NRC facility if approved by regulators. It was announced by Prime Minister Justin Trudeau in May of 2020 as a way to potentially put Canada at the front of the line for a COVID shot.


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It was developed using a cell-line that the NRC created and provided to the company, part of a years-long collaboration between them.

But by August, the deal was dead. Chinese customs had refused to allow samples of the vaccine to be sent to Canada in what Beijing critics called another act of reprisal for the arrest here of a Huawei executive Meng Wanzhou. The NRC then pulled the plug.

Meanwhile, CanSino did provide vaccine to Russia and other countries. Recently released trial results from Pakistan suggest the one-dose shot is about 66% effective at preventing symptomatic COVID-19.

McCuaig-Johnston said the CanSino saga should be a lesson to Canadian researchers and government officials.

“Canadians are learning this hard lesson, and are realizing that we should diversify our collaborations away from China and focus on partnering with countries that follow the rule of law.”

Canada has, though, continued to work with CanSino and its vaccine. Drs. Scott Halperin and Joanne Langley of the Canadian Centre for Vaccinology at Dalhousie University are listed as principal investigators on the shot’s phase three trials in other countries.

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