(Adds context on ventilators)

April 20 (Reuters) - Training specialist CAE said on Monday it would recall 1,500 furloughed employees and had signed a contract with Canada to make 10,000 ventilators in response to the coronavirus pandemic.

Governments around the world are turning to industry to boost the number of available mechanical breathing devices that can supply air and oxygen, crucial for the care of people who suffer lung failure, which can be a complication of COVID-19.

Companies like Europe’s Airbus SE and U.S. automaker General Motors Co are building ventilators while Canadian plane and train maker Bombardier will help medical company O-Two Medical Technologies produce the equipment in Canada’s province of Ontario. Montreal-based CAE, which specializes in civil aviation training, and manufactures full-flight simulators, said it expects the ventilators will start being delivered in early May to health authorities for certification.

The training specialist, which also provides medical simulation training products, said it is also bringing Canadian employees back as part of a government wage subsidy program that helps put workers back on payroll.

The Canadian government on April 11 approved a wage subsidy program, known as the Canada Emergency Wage Subsidy (CEWS), which would cover up to 75% of workers’ wages for businesses that have suffered due to the pandemic.

CAE Chief Executive Officer Marc Parent said the wage subsidy program will allow Canadian industry to put staff back on payroll and be “better positioned to rebound when the current challenges have passed”.

The aviation industry has been hard-hit by the coronavirus pandemic which has led to cancellation of flights and grounded aircraft worldwide.

The majority of the recalled employees are based in Montreal and will work from home. Earlier this month, the company said it would furlough 2,600 of its 10,500 employees, freeze salaries and place some of its employees on a reduced work week to cut costs. (Reporting by Allison Lampert in Montreal and Sanjana Shivdas in Bengaluru; Editing by Shinjini Ganguli and Andrea Ricci)