The Canadian government and the country's flu vaccine manufacturer ID Biomedical have signed a deal that will see the company produce a prototype H5N1 flu vaccine for clinical testing.

In a statement released Monday, Health Minister Ujjal Dosanjh called the contract an important component of the country's pandemic readiness.

Under the contract, the Canadian government will pay ID Biomedical 21.2 million Canadian dollars (18 million US dollars) for a currently unspecified number of doses of H5N1 vaccine.

But the prototype vaccine will not be tested until late 2006. And the process of testing and licensing a prototype H5N1 vaccine will take another year on top of that, Dr. Theresa Tam of the Public Health Agency of Canada said Monday.

Under the deal, if a pandemic vaccine is rushed to market without undergoing the full testing and licensing process, the government will have to compensate the manufacturer for any claims that might arise if there are adverse reactions to the vaccine.