INDY Committee Meeting

STANDING COMMITTEE ON INDUSTRY

COMITÉ PERMANENT DE L'INDUSTRIE

EVIDENCE

[Recorded by Electronic Apparatus]

Wednesday, April 28, 1999

• 1534

[English]

The Chair (Ms. Susan Whelan (Essex, Lib.)): I call the meeting to order.

Pursuant to Standing Order 108(2), this is a study on information technology preparedness for the year 2000. We're very pleased to welcome today our witnesses from Statistics Canada. We have Dr. Ivan Fellegi, Chief Statistician of Canada, and Mr. Jamie Brunet, year 2000 survey manager.

Mr. Dubé has just informed us that there may be a vote unexpectedly. If that happens, we'll have to vote and come back. We'll begin anyway and see how it progresses.

With that, I'll turn it over to you, Dr. Fellegi.

• 1535

Dr. Ivan P. Fellegi (Chief Statistician of Canada, Statistics Canada): Thank you very much. I'm very pleased to be back here—not in the same room, but in front of the same committee.

Last time when we carried out a preparedness survey we were briefing you afterwards. We now have the third such survey carried out, and the results were released on Tuesday. This time around the issue we tried to explore was really the state of readiness, not so much the process of preparing but the state of readiness, including contingency planning and communications with partners. We tried to break it down into a lot more detail in terms of the technology that is actually used currently, and have results by firms that are using different types of technology, how ready they are, and what their contingency plans are.

The reason I'm mentioning this is that this time around, unlike the previous two surveys, the questionnaire is a lot more complex; the survey is a lot more complex. And nobody is an instant expert on it. We have been trying to basically release the data as soon as the data are available, so that they're available for a lot of analysis. A lot of people are doing contingency planning in great detail by industrial sector, by region, and we wanted to put the data in their hands as early as possible. What I'm giving you today are essentially highlights that we have found out to date. I really want to underline the importance of much further analysis, going into much more detail, drilling into the data and exploiting it in full.

[Translation]

This time around, our survey focused not only on businesses, but also on health sector organizations and on municipalities. The size of our sampling enabled us to break down the results according to five regions: the Atlantic, Quebec, Ontario, the Prairies and British Columbia.

[English]

We are also capable, given the larger sample size, of breaking the results down by industrial sector, and we have given an indication on chart 4 of the kinds of industrial sectors where we can provide breakdowns.

Chart 5 shows that most organizations are basically showing a great deal of progress since the last time we have undertaken this survey, showing progress in taking at least some steps in preparation for the year 2000 problem. That's not to say they are ready necessarily, but the awareness is no longer an issue, so they are into doing something. That's true essentially for all size groups, even the very smallest. At this stage 84% are trying to prepare their technology for the year 2000 problem, and when you go up to medium or large... it's essentially up to 100% or just about. That's in terms of being aware and doing something about it. That's not necessarily being ready.

[Translation]

Over the next several minutes, I will be talking about large businesses, that is those with 250 or more employees. As can be see from chart 6, these businesses account for 85 per cent of economic activity. If these businesses manage to do well, then the economic downturns will be moderate or minimal. Since large organizations tend to use more sophisticated technologies and more advanced systems, they are also more vulnerable. For this reason, I will confine my remarks to large organizations.

• 1540

[English]

As chart 7 shows, the large organizations are essentially doing things that we expect enterprises, or businesses or anybody, to be doing at this stage. They either have done or are currently doing an inventory of their vulnerabilities, their systems. Almost everybody, 98%, is testing or planning to test, and everybody expects to have their systems ready by the end of the year. This is the good news.

Really, if there is one qualifier on this good news, it's on the next page, which is chart 8, and that's the timeline. Up until now I was talking about the fact that they are doing things—just about everybody—but where are they along the activity that one imagines should be carried out?

The heavier bars on chart 8 show the proportion of large organizations that in February, when we took the survey, said their critical systems will be ready in April, or June, or the end of August, or the end of October, or the end of December. The issue that might be cause for some concern is that as of February, only 18% of the large enterprises expected to have all their critical systems actually ready, tested, and fully implemented by April.

When one compares that particularly with the fact that last year in May, when we carried out the previous survey, the same large enterprises said that 42% of them will be ready by the end of 1998, clearly the expectations a year ago were too optimistic. Are the expectations now too optimistic? We don't know. All we can report is what the enterprises say. They expect to be ready, but they aren't yet. That's essentially the significant caveat on what is a very positive picture.

We then break it down on chart 9 by sector, and essentially what you expect to find there... you find finance and insurance started early. They are in pretty good shape. Just about all of them expect to be ready by October, a very large majority by the end of August. And you go down... energy, transportation, etc.—not a bad picture. Health is a source of concern. Less than half of the health institutions—and these are large health institutions, are not small doctors' offices—expect to have all their critical systems ready by August, and less than 90% by the end of October. That is potentially a cause for concern.

The Chair: Dr. Fellegi, I have to apologize. The bells are ringing and we've been requested to return to the House as quickly as possible. They don't want the bells to go for the entire 30 minutes, it's my understanding, so if members are able to get back there quicker...

Dr. Ivan Fellegi: I'll leave these charts with you.

The Chair: What we'll do is we'll suspend and we'll be back. So you can just take a break.

Dr. Ivan Fellegi: Oh, okay.

The Chair: We'll be back. We're going to suspend for now.

• 1543

• 1632

The Chair: I apologize to our witness for that delay. Unfortunately, those things happen, and hopefully it won't happen again this afternoon.

For committee members, I propose that we continue until 5.30, and we'll delay the steering committee until right after. It's only a short, one-question type of meeting anyway, or we can do it tomorrow. We'll see how things progress now.

Dr. Fellegi, would you like to continue?

Dr. Ivan Fellegi: Yes. I was around chart 10, more or less, and essentially what that shows is that basically the air transportation, electricity, finance, and energy are in really good shape. They expect to be ready in overwhelming proportions by August, and everybody later on. Once again, care homes and hospitals are the two sectors that stand out on the other end of the spectrum that will be the latest.

The next slide, number 11, just opens the curtain a little bit on the regional dimensions of the survey. It shows essentially the highlights so far, but we haven't nailed down the data very far. The highlight is that there is not very much regional difference. The regions seem to be more or less in parallel in their preparations.

I'll skip chart 12 and go to chart 13. This chart essentially provides a little bit of an insight about the interpretation of the timelines on which the companies are—not only when they are going to be ready, but where are they on the timeline? This is the result of a question we asked: “When you got into testing, did you find many more problems, a little more problems, about the same number of problems as expected, etc., or somewhat fewer problems or much fewer problems?” Essentially the last three lines, if you add them all together... 85% of the companies say they didn't find more problems than they expected. They found about as many or fewer. So you can interpret them whichever way you want; the glass is 83% or 85% full or 15% empty. It's a little bit of a reassurance that maybe the expectations are realistic, because when they get into testing, overwhelmingly they don't find many more problems than they expected.

• 1635

I'll skip chart 14.

Chart 15 is again a quick review of the kinds of contingency planning that companies are doing—and these are all large companies—and the proportions that are engaged in the different kinds of activities. The main highlight here is really the note at the very end of the chart, that 85% of the large companies are doing at least one of those different contingency planning activities. So they are at least aware not just of getting ready, but also, in addition, of getting into contingency planning, like alternative processes or alternative suppliers or service providers. They are exploring their options. Of course, none of these will be applicable to everyone, so the issue is that they are into contingency planning, and overwhelmingly they seem to be.

When we get to the next slide, unless you want me to go through... in order to save time I'll skip between 16 and 21. They provide a little more information on the medium- and small-sized enterprises, but I propose to just skip over that here now, unless you have questions. Of course, I'll leave these copies here for you to explore.

[Translation]

In conclusion, I'd like to say a few words about the results of our survey on municipalities. Chart 21 is similar to the one about organizations and their share of overall economic activity. This chart shows the share of total population represented by large and medium-sized municipalities. Large and medium-sized municipalities account for 83 per cent of the population, compared to 13 per cent for small municipalities. Again, it should be noted that while the population is more concentrated in the larger municipalities, there is also a greater likelihood that these municipalities use more advanced, sophisticated and complex technologies, which makes them more vulnerable. For all of these reasons, I believe here again that we need to focus our attention on the large municipalities.

[English]

I'll skip chart 22.

Chart 23 shows the number of municipalities by size that are taking any steps in the Y2K issue—any steps with respect to their police services, ambulance, fire, water, and sewage respectively. Again, this looks reassuring, with the exception perhaps of the fire services in the smallest municipalities. That's the first column, the third number there, 79%, which means that about 20% of the very smallest municipalities don't seem to be doing anything whatsoever. There is no preparation at all with respect to fire services. They may not need a Y2K kind of compliance, because these are very small places. Maybe it's a volunteer fire Brigade, I don't know. I'm speculating. The data simply say that that's the score. Other than that, everybody is into doing something.

[Translation]

Chart 24 is similar to the one on businesses. It represents the level of preparedness of municipalities and gives the expected completion of timelines, namely April, June, August, October and the end of December. The profile for municipalities is similar to that for businesses. The same questions were asked. Are the plans in place reasonable? Will they satisfy expectations? Should certain problems be expected to arise? The main question is whether municipalities' expectations are reasonable.

[English]

It's the same with respect to chart 25. It's for the other three services that we have looked at in the municipalities: ambulance, police, and fire. There is a similar kind of profile of preparedness.

I'll stop there, Madam Chair. I'll be glad to take questions.

The Chair: Thank you very much, Dr. Fellegi.

I'm going to begin with Mr. Jaffer, please.

• 1640

Mr. Rahim Jaffer (Edmonton—Strathcona, Ref.): Thank you, Madam Chair. From what I was able to attend through your presentation, it's starting to seem very reassuring that there's a lot of progress being made on the issue of Y2K.

I guess the only question I have, Doctor, is this. For this committee we have the summer break fast approaching and then we have the fall months that remain just before the whole Y2K problem, as we've been dealing with, will come to the fore. If you were to give us advice on this committee as to where we should be focusing our attention or interests over the next little while, given the last few months heading into the actual Y2K problem, where should we be focusing our interests, or where would you suggest that we should put our energies to try to help some of the other industries or try to bring light to areas where there are still weaknesses?

Dr. Ivan Fellegi: As chief statistician, I'm not supposed to be in the policy advice domain, but the data are kind of indicative so far. This is early. You weren't here when I emphasized at the very beginning that there's a lot more analysis that—it's a very rich data source, much richer than the first two surveys we carried out. So there's a lot more to learn and exploit yet.

But there are a couple of industrial sectors that seem to emerge as being, at least as of this date, a little further behind, and clearly the health sector would be one that would concern me if I were in your shoes. That's just simply what the data seem to show.

There are really two qualifiers as far as I'm concerned. We seem to be in basically good shape if the plans are realistic. That's one area. How realistic are the plans? We don't know that, of course. We are simply collecting information from very reliable sources. We went to the people in each enterprise who are assigned responsibility for the Y2K issue. As far as they are concerned... presumably they gave us... they had true expectations at that time. The question is, will they actually meet their own timelines?

The other one is the few sectors that seem to be a little further behind, and health seems to be further behind than the others.

Mr. Rahim Jaffer: That's all I have.

The Chair: Thank you very much, Mr. Jaffer.

Mr. Shepherd.

Mr. Alex Shepherd (Durham, Lib.): I was just trying to clarify something you said in passing. You compared this sample result with some of the previous ones, and you said in the previous ones that there was a higher statistic claiming that they were dealing with the problem. If I haven't got this right, you're going to have to interpret for me. What these figures actually show is the inconsistency between what you received in that sample as opposed to this one, and that was if they were ready or not. That seems to have dropped down again. Could you clarify that?

Dr. Ivan Fellegi: Sure. The point was that... it's not quite the same question, but more or less a similar question was asked back in May of last year in a similar survey. Basically, we asked, when do you expect to be ready with your Y2K preparations. Some 40%—42%, I think was the actual number—back in May expected to be ready completely by the end of the year last year, 1998. When we went back in February 1999, only 18% expected to have their critical systems—not totally everything, but even just their critical systems they expected to have ready by the end of April.

Mr. Alex Shepherd: So how do you square that inconsistency?

Dr. Ivan Fellegi: Well, it means they were far too optimistic a year ago. They expected to be much further along than they seem to be, which is why I mention—

Mr. Alex Shepherd: The obvious next question is, do they continue to be optimistic?

Dr. Ivan Fellegi: That's my reservation. That's what I mentioned is my only reservation. Everybody expects to be ready. Is it realistic? I don't know. I simply don't know. I just mention it as a cautionary word that last year they were also quite optimistic and they didn't quite make it.

Mr. Alex Shepherd: From a statistical point of view... I think it says you have respondents of 10,000 to the survey. What sort of a sample size did... How many did you actually send out that didn't respond?

Dr. Ivan Fellegi: We had a response rate of close to 80%, and that's very good.

Mr. Alex Shepherd: So this is statistically up to date.

Dr. Ivan Fellegi: Oh, yes. What the survey shows is a valid reflection of what's out there in terms of what people would say if we contacted everybody. That's all I can say. We haven't audited anybody, so I don't know whether what they say is true. But I can say the sample is a big sample.

• 1645

A voice: The number of responses is 10,100.

Mr. Alex Shepherd: I'm not questioning the authenticity of the process. I guess what I'm wondering is if there is some kind of a skewed distribution going on here. In other words, have we sent this to a large corporation? Maybe the IT people are expected to fill this out. Is it good politics to show that you're a lot more prepared than in fact you really are? Is there that kind of skew in the—

Dr. Ivan Fellegi: We didn't send out the questionnaire; we actually telephoned. That was apparently the most time consuming part of the survey: to try to identify the right person to talk to, the person who is in charge of the Y2K preparations.

We put these questions to that person. I can't say anything about the veracity of the responses. I can say that this is how they responded.

Mr. Alex Shepherd: But you understand my point of view. I'm just saying if we sent it to our director in charge of IT, or whatever he is, and he's already nervous about this area, do you see some percentage in him having a tendency to be more optimistic about what he's doing than what may in fact be reality?

Dr. Ivan Fellegi: I understand the question. I just simply don't know the answer. I can say this much. These results are very consistent with what you read, what industry associations seem to be saying, and what various researchers and consultants seem to be reporting in terms of which are the sectors that are best prepared, which are the sectors that are least well prepared, and where they are in terms of timelines. It seems to be consistent with what's floating out there. It's kind of anecdotal information. Beyond that, I can't assert that this is true because we don't know that. We haven't audited.

Mr. Alex Shepherd: I haven't read entirely through your survey, but I would be interested to know if you did any sampling—I guess in the area of small businesses—to see how effective that tax write-off was, that people were taking advantage of that or they were aware of it. Did you do anything like that?

Dr. Ivan Fellegi: No, we didn't have a question on that at all.

Mr. Alex Shepherd: It is something I've been picking up from suppliers and so on who are saying now is a good time to change your system so you can get this rapid write-off.

That more or less concludes my questioning. I guess the concern that exists within these things is whether we're too optimistic.

The other area is hospitals. They seem to be some of the least prepared. I don't know if you put everybody in the same category—hospitals—but there must be large hospitals and the smaller regional or local hospitals. Is there any kind of analysis on which hospitals are least prepared?

Dr. Ivan Fellegi: We can. We haven't done it. As I say, this is early. These are just tip-of-the-iceberg kinds of results. We are doing a lot more analysis. We do have the size in terms of number of employees of all the hospitals we contacted, so we can sort bigger from smaller.

Mr. Alex Shepherd: I see. So this is some further analysis that you're going to be doing.

Dr. Ivan Fellegi: Yes, we can do that. Not only that, but I'm sorry, I should have mentioned also by technology used. That's quite important to emphasize. We have asked not just an overall kind of question, when do you expect to be ready, but we asked what kinds of technologies that are Y2K sensitive are you involved with. Then for each of those kinds of technologies we asked, where are you in the preparedness, in the testing, assessment testing, implementation? When you break it down by kind of technology, the results are a lot more positive than the overall.

That seems to say there's a lot more progress being made on particular technologies. It's when they try to put it all together: Am I ready? I'm not quite ready.

That would be an early interpretation, but again, we haven't done in detail the analysis of breaking down for each technology how far along the implementation they are. That's something we will be doing in the next few weeks.

Mr. Alex Shepherd: I guess there's no thought process about replacement. It is only because I've gone to some hospitals and I know they're going through a... They even have little dots that they put on equipment that they've identified is a problem. The one thing some of my own hospitals have told me is they have identified them, but they don't have any money in their budgets to replace them.

• 1650

Is that something that comes up through your statistics?

Dr. Ivan Fellegi: Certainly it would come up in terms of them saying they are not ready or they are not expecting to be ready until such and such a date. We didn't ask a specific question, do you have enough money to cope with the issue, so we can't pin it down in terms of causes like that.

The Chair: Thank you very much, Mr. Shepherd.

[Translation]

Go ahead, Mr. Dubé.

Mr. Antoine Dubé (Lévis-et-Chutes-de-la-Chaudière, BQ): On reading the daily bulletin that was released, one is left with the impression that everything is under control and that the problem has been rectified. The overall tone is very optimistic. However, when we look at some of the charts more closely, in particular the one dealing with the primary sector, we note some cause for concern. Does this chart take into account small businesses and do farms fall into this category?

Mr. Ivan Fellegi: We have drawn up separate charts for large, medium and small businesses. I believe we included some farms, but I can't be certain about that.

Mr. Jamie Brunet (Year 2000 Survey Manager, Statistics Canada): The first chart covers large firms, whereas the fifth includes all firms, regardless of size.

Mr. Antoine Dubé: Were farms with fewer than five employees classified as a small business?

Mr. Jamie Brunet: Businesses with fewer than five employees were not included in our survey, although I'm certain some farms with more than five employees were included in this category.

Mr. Antoine Dubé: The fact remains that there are many businesses in Canada with fewer than five employees and we have no idea of what their level of preparedness is. Judging from the trend that seems to be emerging, large businesses are ready, medium firms less so and small firms even less so. Therefore, I think we can safely conclude that some very small businesses are not prepared at all to deal with Y2K.

Mr. Ivan Fellegi: We don't know the answer to that. They are probably less vulnerable because they generally rely on systems that are not as complex.

Mr. Antoine Dubé: On page 23, you focus on fire departments in small municipalities with a population of between 1,000 and 5,000 and note that 79 per cent... In footnote 2, you observe that 63 per cent of fire departments have not taken action, believing Y2K is not an issue for them. Should we take them at their word? Are they just saying this because they're unaware of the problem and don't use computers, or is there some other reason?

Mr. Ivan Fellegi: We don't know. Let me look at the reference.

Mr. Antoine Dubé: There are two footnotes on page 23. The second says that "63 per cent of fire departments not taking action said Y2K not an issue".

Mr. Ivan Fellegi: That's what they believe. We can only report on what was said.

Mr. Antoine Dubé: Despite my limited medical experience, I know that when people don't know that they are sick, it's even worse.

Mr. Ivan Fellegi: Again, people have generally heard about Y2K, but it's impossible to know if they truly appreciate the extent of the problem.

Mr. Antoine Dubé: In response to a question from Mr. Shepherd, you mentioned a recent survey dating back to September. Is that correct?

Mr. Ivan Fellegi: To May of last year.

Mr. Antoine Dubé: May I ask what your future plans are, although you may have already mentioned them?

Mr. Ivan Fellegi: At the moment, we don't have any.

• 1655

Mr. Antoine Dubé: You have nothing planned from now to January 1, 2000?

Mr. Ivan Fellegi: No, because now, it's time to take action.

Mr. Antoine Dubé: I understand. Thank you.

Mr. Ivan Fellegi: As I pointed out when I last appeared before the committee, we could still conduct surveys targeting a few sectors or regions where problems could arise. However, a general survey requires at least two months...

Mr. Antoine Dubé: And you're not planning to do another one?

Mr. Ivan Fellegi: No.

Mr. Antoine Dubé: Would you be prepared to entertain some requests from the committee or from Industry Canada?

Mr. Ivan Fellegi: Yes.

Mr. Antoine Dubé: Thank you.

[English]

The Chair: Thank you very much, Mr. Dubé.

[Translation]

Mr. Bellemare.

Mr. Eugène Bellemare (Carleton—Gloucester, Lib.): Thank you, Madam Chair.

[English]

Thank you for your report. Was the questionnaire done by phone or by a write-in?

Dr. Ivan Fellegi: It was by telephone.

Mr. Eugène Bellemare: That concerns me a great deal, not the way you did your work, but the fact that most of these people you've been discussing this with are business people, and business people have a psychology that says everything is going to turn all right: the car I bought this year is going to last 25 years, every flight will fly on time, everything is going to be nice, and my investment is going to give me 20% this year. It's always rosy. Business people have a salesman's approach. I think that culture is fine. You have to accept that. Otherwise, if you had someone selling you anything who was negative and overly cautious, you'd wonder if you should be buying from that person.

I'm concerned here that you may have been getting good slaps on the back, be happy, smile, we're going to have a nice day, and by that time everything will be fixed.

The questions I would have liked to have seen asked would be on testing and deadlines, auditing by exterior organizations, and contingency planning. These three questions concern me a great deal, because all of this is sort of like “be happy and smile” type of information.

In this “be happy and smile” type of information, if I question it further... I look at page 7, for example:

Large organizations say they are taking steps with their critical systems.

And they expect to have all critical systems ready by January 1, 2000. That's alarming. I would expect that they should expect to have everything done by July 1, 1999, not January 1, 2000.

The second point is that on page 8 you say:

Nine in 10 firms expect to have all critical systems ready by November.

Again, it's the word “expect”. There is no guarantee. There's nothing to really rely on except that nice pat on the back again.

On page 10, again, they expect to be ready... I would ask you this. You say by August, 97% of air transportation, by October, 100%; in food, 79% in August, 96% in October. These expectations may appear to be optimistic, but if you're cautious, they're not optimistic. Is that a valid question? If so, is the answer valid really because of the importance of the Y2K problem?

• 1700

Here's one that's really alarming. On page 14 it says:

Percentage of large organizations inquiring about the preparedness of their customers, suppliers and service providers

Health, 83%.

I thought health was much more important than finance and insurance. A lot of people depend on medical devices. You would expect the hospitals to at least have inquired. You say that only 83%... 17% have not inquired. I find that alarming.

On page 17 it says:

Small firms not taking steps: many say it's not an issue.

I guess there are more dummies in Canada than I thought there were when I see the results. These people who say Y2K is not an issue, or they are not worried, or they are assuming their system to be fixed and ready by some act of God, I suppose... Have you checked to see if any of these who have asserted these things are either suppliers or depend on suppliers? If they are either suppliers or they depend on suppliers, then there's a chain effect, a domino effect, that this country could suffer in business and other areas.

On page 19—

The Chair: Mr. Bellemare, I think maybe you should let Dr. Fellegi answer some questions. You're going through all the slides. I'm not sure—

Mr. Eugène Bellemare: What I'm trying to do, Madam Chairman, is give him the gist of... His report gives me great concern, and I want to give him an idea of why it gives me concern. I know if I ask specific questions on each page, he'll have an answer for each of them, but I want him to answer on his total report vis-à-vis my concerns.

The Chair: Okay.

Mr. Eugène Bellemare: I'm not testing him for his process or methodology, but perhaps some of the questions that could have been asked—and I'm nearly through; I have two more pages and I'm done.

On page 19, small firms, I am appalled—this is not your fault. Critical systems that would be ready by the end of April... Nous voilà à la fin d'avril. In Ontario, 32% of small businesses have taken steps to prepare their critical systems. My gosh, we're nose to nose with the Northwest Territories, Nunavut, and we're behind the Yukon and the Atlantic provinces. I can't believe that Ontario, the engine of this country, is lagging so much behind or is nose to nose with—not that I want to downgrade Nunavut, but Nunavut is not the manufacturing engine of this country; far from it. Neither are the Northwest Territories or the Yukon.

Lastly, page 24—thank you for your patience—says:

Large municipalities: when will their systems critical to water and sewage be ready?

You say that 45% and 42% will be ready by the end of June. That's shocking. That's alarming. Is there something I'm missing in my reading? Is there something in your methodology? And I say that respectfully. I'm not contesting your methodology. Is it the questions? Should they have been written down and signed by people so we could have a more accurate answer? After looking at this I'm not optimistic. I'm less optimistic than I was before. Am I wrong or right to think so?

Dr. Ivan Fellegi: I can't answer the last question because I simply provide information for you to come to conclusions of your own on the basis of the information. I have a great deal of confidence in the information we collected.

• 1705

We didn't talk to businessmen per se, in the generic, as I mentioned earlier. That's your first point. In each organization we went to the person in charge of the technology and implementation of the Y2K plans. If that person is optimistic, then our reports reflect that optimism, because that's all we can do. We didn't audit. We are not entitled to, and firms are not required to allow us into their operations in an auditing mode. Besides, of course, it would have cost an absolute fortune to have 10,000 audits carried out. The sample size is 10,000.

Mr. Eugène Bellemare: But asking them if they have been audited by an exterior audit...

Dr. Ivan Fellegi: Well, we didn't ask that, but we did ask a whole lot of very detailed questions about the kinds of technology they are using, the kinds of testing they are doing, the kinds of preparations they are making, and we can break that down in terms of what they say where they are.

As to whether or not you should be optimistic or pessimistic, I wasn't trying to mislead anybody, and I don't think the survey and the kinds of general public reporting we did... We tried to be very balanced. We said, in effect, that if everybody's plans are going to pan out the way they expect, then we should be all right—more or less; I'm simplifying the message. But we said there is this concern precisely that you mentioned, which is where they are right now on the timeline. That's the major concern we have underlined in the report. I underlined the same point in my oral presentation as I went through the slides. We simply don't know whether or not people will be ready at the time they expect to be ready.

Are they ahead? Are they too far behind? That's not for me to judge. I can only report on the factual reports that we receive as to where they are and where they expect to be. This is what we heard from them. We didn't audit them, and we are not in the business to audit them. Even if we were in the business of auditing them, we probably couldn't have audited as to where they will be three or six months from now. Even if we had the money and the authority to go in an auditing mode, we could only have assessed where they are at the moment and not where they will be two months from now, four months from now, six months from now. So the interpretation really is entirely for each analyst and for each reader to make. Are they alarmed or are they reassured? This is the picture. We can only be objective, and you have to conclude yourself as to whether you find this reassuring or you find it alarming. But we can authoritatively report on the facts as they have been reported to us.

Mr. Eugène Bellemare: Thank you.

The Chair: Thank you very much, Mr. Bellemare.

Since there are no other questions, I have just a quick question, Dr. Fellegi, about municipalities. When I compare slide 24 and slide 11, which is large municipalities and large organizations, and I look at where they're all supposed to be with their critical systems at the end of April... 18% and 20% to 23% complete is not really a large number in critical systems being ready.

When you look at where they're going in June, by the end of August we're supposed to go from 20% at the end of April to 70% in August, and 18% to 67% respectively. You start to see these huge jumps, and I just don't know if that's realistic. I know you already expressed that to Mr. Shepherd, that they had promised or thought they would be 40-some-percent ready by now, and in fact they're 18%. We know there are some who haven't taken any action at all yet. If I read correctly, about one-fifth haven't taken any action and are waiting to do it until the fall.

That's a concern for large organizations. When it comes to large municipalities, if they're the leaders for municipalities and they're not mission critical—and I know for small ones it's really difficult to break it down, because they're all very different. Do you have any concerns about individual municipalities and where they are?

Dr. Ivan Fellegi: No, I haven't looked at it, so I can't comment on it. I simply don't know. Furthermore, of course, we don't have a census of every municipality; this is a sample survey. Furthermore, for each municipality, we only selected two of the five services on which we questioned them, in order not to overburden one respondent that we contacted. So we cannot give a municipality by municipality kind of assessment. What we can do is show by size ranges as to where municipalities of a certain size are in their preparation.

• 1710

The Chair: When I look at this, I compare the large municipalities and the large organizations, and they seem to have these same timelines now. I don't know if the municipalities had the same timelines as the large organizations did, where they thought they would be 40-some-percent mission critical ready by the end of April, and they're not.

Dr. Ivan Fellegi: They are very similar timelines. Whether or not they will make it, I simply don't know. They are sort of similar timelines. They are not exactly the same, but it's very close, very similar.

The Chair: I know as a committee, when we were doing hearings last year, we were asking everyone to move up their timelines, to try to ensure they were done closer to the end of June. Now we see that the timelines are getting pushed back again, that we're looking at the end of October when things are going to be ready. I just see everybody seeing this big jump from April to October and everybody putting a lot of demands on the same resources that are out there. That's a concern I have. Not to say that their timeline is inaccurate, but when you start to put everyone in the same situation, everybody looking for the same equipment and the same fixes and the same solutions, I'm just not sure they are all going to fit in those last few months together.

Dr. Ivan Fellegi: I don't know either. All I can say is this is what they report.

I'll just make two more comments, if I may. The first one deals with this, and the second one is just a comment to what Mr. Bellemare was saying earlier that I forgot to respond to.

On this one, we do want to do a little more analysis on... As I mentioned, the timelines data are collected by technology used, and early analysis that Mr. Brunet has done, earlier today as a matter of fact—we are just beginning to analyse this rich database—shows that the readiness is much more advanced when you break it down for particular technologies.

For example, on the mainframe systems, where are you on your mainframe systems, in testing, implementation, etc.? Where are you on your embedded chips used in the processing of manufacturing activities? It's that detailed kind of question.

They are much further along. So there is at least some possibility that it's the final putting it all together that is being delayed. I don't know. We'll begin to get some insights when we look at it by detailed technology use. If it shows that they are a heck of a lot more advanced for each of the particular technologies, then it would be a reasonable conclusion to make that it's really just putting it all together and testing in some final integrated mode that is perhaps being delayed, in which case it's much less alarming than the first picture would show.

My last comment is about the question about the Northwest Territories being as prepared as Ontario. That table does not break out the Northwest Territories or the Yukon, but it puts the Northwest Territories together with the prairies. So you are comparing Ontario with the combination of the prairies and the Northwest Territories. The Northwest Territories is too small. We don't have any separate data, and of course given that the prairies have a lot more businesses than the Northwest Territories, it essentially shows the comparison between Ontario and the prairies.

It's the same when you look at B.C. and the Yukon. They're put together, and of course Yukon is dwarfed by B.C. So when you are comparing the last column of that table with Ontario, you are really comparing Ontario with B.C. Yukon is just a little rounding digit there in whatever number is reported for B.C.

The Chair: Dr. Fellegi, we want to thank you. I know that hindsight is 20/20, and I believe Mr. Bellemare raised the fact that one of the questions we would have liked to have seen as a committee is whether or not these companies had independent audits on the systems to see where they are. Unfortunately, that wasn't one of the questions. It's regrettable, but we didn't discuss it much as a committee either until after the questions were already out. But we think that would be a process... I don't know if that's doable now or where you're heading now.

• 1715

Maybe you can give us direction. You're going to do some fine-line questioning right now, as you said. Is there anything else we should be expecting down the road?

Dr. Ivan Fellegi: Yes, we'll be publishing, hopefully by the end of May, a more complete analysis of the data.

The Chair: Great.

On behalf of the committee members, I want to thank you for joining us. I apologize again for the delay with the vote. This meeting is now adjourned.