Canada, which has few facilities that make vaccines and has struggled to import COVID-19 shots, is trying to persuade pharmaceutical companies to set up new factories on its soil with a counterintuitive argument: It’s small.

With 38 million people, compared with 330 million in the U.S., Canada is often an afterthought for companies seeking out new markets. Innovation Minister Francois-Philippe Champagne wants to sell that as an advantage to vaccine makers, telling them facilities in Canada are ideal because they can meet local needs in no time -- then export all other production.

“One of the things they face now is all of the challenges around supply chain and export restrictions,” Champagne said in an interview with Bloomberg on Tuesday. “In that sense, Canada becomes attractive for them -- talent, no export restrictions and a population that you can satisfy because of the number relatively quickly, and then use as a base.”

Vaccine nationalism has dogged a number of countries, including Canada, that aren’t big vaccine manufacturers. The European Union’s vaccine export restrictions have left the northern nation vulnerable. Canada has been one of the largest purchasers of COVID-19 vaccines from EU factories as the U.S. refused to export them, until recently.

As a result, Canada’s inoculation campaign is off to the second-slowest start among the Group of Seven. Efforts have focused on giving out as many first doses as possible, so just 1.8 per cent of the population is now fully vaccinated, compared to 16.1 per cent in the U.S. and 5.7 per cent in the U.K., according to the Bloomberg Vaccine Tracker. Canada has by far the smallest population in the G-7.

Champagne said the biomanufacturing sector left the country decades ago, resulting in insufficient capacity to attract big players. Only two sites in Canada, which produce polio and influenza vaccines, have the capacity to “fill and finish” more than 100 million doses a year, he said. Most others hit a 30 to 35 million doses limit, which helps explain why Canada has had to rely on imports during the pandemic, he said.

“Why did some of the bigger manufacturers not choose to do a tech transfer to some companies in Canada, as you’ve seen in some countries? It was really the fill-and-finish capacity,” he said. “I’m trying to beef that up.”

Sanofi Deal

The government and Sanofi SA announced investments in a new facility in Toronto to increase the French drugmaker’s supplies of its high-dose influenza shot for Canada, the U.S. and Europe. Set to open in 2026, it will be able to make enough doses for the entire Canadian population within six months in the event of a future flu outbreak, they said.

A few weeks ago, Prime Minister Justin Trudeau unveiled plans to manufacture Novavax Inc.’s COVID-19 shot in Canada at a facility being built in Montreal by the National Research Council, a government agency. Production is set to begin in late July.

The government is also betting on Canadian vaccines and therapeutics, with investments in companies developing their own products, including Vancouver-based firms Precision Nanosystems Inc. and AbCellera Biologics Inc., and Quebec City-based Medicago Inc.

“You’ll see more of that, because what I’m trying to do is to fill the gap,” Champagne said. “Whatever may come next -- I don’t have a crystal ball, but one thing I know is that Canadians would like us to be better prepared.”