VANCOUVER -- The rising cost of respirator masks and other personal protective equipment has led to complaints of price gouging in B.C. – but one company says its increased prices reflect the reality of getting highly sought-after goods into Canada in the midst of a pandemic.
On Tuesday, the Showcase store at Lansdowne Mall was selling N95 masks for $10 a piece and the similar KN95 masks, which Health Canada recently approved as an alternative to the N95, for $8 a piece.
Even in bulk, the company charges $399.99 for a box of 50 KN95 masks through its website, a price some customers told CTV News they felt was unreasonably high.
But Showcase CEO Samir Kulkarni said the company is actually charging less than its usual markup for the masks, pointing to a huge increase in the cost of getting goods into the country, including what he said was a 1,705 per cent hike in air freight charges.
"Showcase doesn't price-gouge," he said. "The reality is that we're paying massively inflated costs on the world market. We're contending with bigger countries and bigger companies in trying to secure Canada's fair share of essential supplies."
Companies trying to move goods out of China face "literally a bidding war" to get space on a plane, he said, and moving shipments by sea isn't an option because it takes too long to keep up with demand.
Consumer Protection B.C. has received about 1,600 complaints about possible price-gouging and re-selling over the last several weeks, and is still in the process of investigating the validity of many of those reports.
President Rob Gialloreto told CTV News that a company charging $400 for a box of 50 respirator masks would have immediately set off alarm bells two months ago. Today, he's not so sure.
"We've heard that complaint before, specifically about that amount for that many masks, but we would have to investigate," he said. "We know that businesses are spending more, wholesalers are charging more, and we get it – that's kind of a normal thing when we're in a state of emergency."
When it comes to identifying price-gouging in the marketplace, Gialloreto said it's clearer when one retailer is selling items at an "egregious price" compared to what other retailers are charging for the same product.
Gialloreto's team deals with consumers and companies in order to determine whether prices are justified. Businesses found to be gouging people during the pandemic can face fines of $2,000.
And clear cases of price-gouging have emerged through the investigations Consumer Protection B.C. has conducted so far, some of them involving popular retailers.
"We're talking about well-branded stores," Gialloreto said. "It's not a small problem. I think it's a significant problem in the marketplace that's going to last (as long as we're) we're under a state of emergency."
Emergencies like the one British Columbians are currently rallying to overcome are "not a time to make an unreasonable profit from people," Gialloreto added.
The CEO of Showcase said his company is spending a whopping $7 per KN95 mask purchasing the products and getting them shipped overseas, which leaves about $1 to cover their rent and labour costs.
He said the masks are made with medical-grade fabric by a Chinese manufacturer that used to produce electric cars but pivoted to making PPE – an expensive transition that contributed to the inflated cost of purchasing the masks.
Kulkarni acknowledged his company has been approached by different government bodies about its prices, but said Showcase is always found to be acting appropriately.
"Obviously there is some sticker shock when people first may see a price and not understand the context," he said. "Every single inquiry by a government authority, once we have shown the documentation and the cost that we're paying, has been closed and resolved without incident."
Availability of PPE has been an ongoing issue for governments and health care workers, including in B.C., though Health Minister Adrian Dix said Tuesday that the province has recently obtained 3.7 million respirator masks. That includes 700,000 KN95s.
With files from CTV News Vancouver's Jon Woodward