It's not really intellectual property that is the issue, it is the contract Canada signed with the company. It's really no different than if Canada contracted with a food distributor and the distributor was dragging its feet. The issue there wouldn't be food property rights, it's picking the shitty distributor.
How does this story reflect on whether or not patents are vital to this industry? That seems a bit like reading a story about a drowning and saying, "This makes me wonder if water is really vital to human life." And I don't see how any of this reflects on other forms of intellectual property.
If IP disputes stop you using something when society as a whole really needs it, it doesn't really matter if the existence of IP was an efficient way of motivating the creators of that thing, as it is still effectively useless.
Patent law already covers this case. TRIPS Agreement, article 31b allows "society as a whole" to use a patent without even contacting the patent holder "in the case of a national emergency or other circumstances of extreme urgency or in cases of public non-commercial use."
Now try replacing IP with personal property.
Personal property is subject to compulsory purchase all the time for municipal infrastructure and in times of emergency is subject to state requisition without compensation.