INDY Committee Meeting

STANDING COMMITTEE ON INDUSTRY

COMITÉ PERMANENT DE L'INDUSTRIE

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, April 21, 1998

• 1530

[English]

The Chair (Ms. Susan Whelan (Essex, Lib.)): I call this meeting to order. Pursuant to Standing Order 108(2), we'll continue our study on information technology preparedness for the year 2000.

I'd like to advise both the committee members and witnesses before us that there is going to be a slight amendment to our agenda. We'll be meeting with the Information Technology Association of Canada from 3.30 p.m. to 4.30 p.m., and we'll be beginning with the Department of National Defence at 4.30 p.m. There's now a vote scheduled for 5.45 p.m., and there are several votes. In light of the fact that several members of the committee have commitments later on this evening, we'll try to finish before the votes. That's the plan.

That being said, we'll begin with the Information Technology Association of Canada. We have before us Mr. Gaylen Duncan and Ms. Carol Stephenson.

Mr. Duncan, I believe you were going to begin.

Mr. Gaylen Duncan (President and Chief Executive Officer, Information Technology Association of Canada): Yes, thank you.

Madam Chair and honourable committee members, good afternoon. It's a pleasure to be invited to appear before you on the issue of the millennium bug. With me is Carol Stephenson. She was a member of the Jean Monty Y2K task force, is president and CEO of Stentor Resource Centre, and is the incoming chair of ITAC. Also with me is Tony Carlson, our vice-president of communications, and Barbara Wynne-Edwards, government relations.

As you may know, with its affiliates, ITAC represents some 1,300 companies across the country in the computing and telecommunications hardware, software, services and content sectors. Our members represent more than 70% of the IT industry sector, which, to size it for you, accounts for some 418,000 jobs, $70 billion in revenue, $3 billion in annual R and D spending, and $21 billion in exports.

Since our time for formal opening statements is limited, let me get right to the point: Yes, Houston, we do have a problem, but, no, the sky is not falling.

I was an adviser to the private sector task force chaired by Jean Monty that reported in February, and ITAC contributed an in-depth international readiness and best practices study to that task force's work. We fully endorse the findings of the task force, whose recommendations and guidelines mirror what we have been working to develop and communicate with our members for the better part of the last four years. The thrust of the task force work was to raise awareness of the issue but, more importantly, to move decision makers beyond awareness and into action. Although I've seen little quantitative research on the effectiveness of the task force's message, all of the anecdotal evidence I've gathered tells me business people are moving to make sure critical systems are ready in time.

I do not want to minimize the challenge, for it is formidable. People who are continually raising the alarm, however, do play a role in spurring others to action. As well, we must continue to communicate a sense of urgency that the Monty task force set in motion by reporting several months ahead of schedule, for there are already signs that the millennium bug is upon us.

In a recent survey, our counterpart organization in the United States found that 44% of businesses had already experienced software failures related to the year 2000 under actual operating conditions, and two-thirds had come across failures during testing. In one case, the entire traffic control system of Phoenix shut down for three days when individuals tested their readiness or lack thereof. There are now at least three class action suits filed in the United States against software firms by companies objecting to have to pay for year 2000 upgrades.

So the activity has already started.

It is important to underline both the importance of the issue and the urgency with which we must seek solutions. It is important to keep information such as this in front of the public eye. But it is equally important to temper these anecdotes with success stories and trends that, from a survey of various sources, are heading in the right direction.

In a study of its own, the Conference Board of Canada is sticking to its prediction of 3.2% growth in the Canadian economy in 2000. It cites some interesting points contained in the Statistics Canada report done for the Monty task force. StatsCan found that, as of last November, 45% of companies had taken steps to address the issue. Of those, 20% had formal action plans in place. That may not seem like a lot, but consider that the 45% who had started work represent 88% of total employment in Canada. Even better, those with formal plans represent 61% of total employment in Canada.

• 1535

The Conference Board noted that the majority of those who had taken action were large companies. In an April economics statement the Bank of Montreal echoed the confidence that most large companies, both financial and non-financial, will be compliant in time.

And by the way, the bank predicted just a small and brief economic blip in the first quarter of 2000. It saw no evidence of a longer downturn or recession.

What about smaller firms? I do not speak for small firms in general, although a significant portion of the ITAC membership would be classed as SMEs. But I note that just last week the Canadian Federation of Independent Business released its own research. It shows that almost 57% of their respondents have taken action, and a further 36% plan to take action in the near future. The federation study says that just under 29% report that they are now compliant, and a further 27% say they will not be affected because they do not rely on information technology. This is a most unfortunate statistic from ITAC's point of view.

To cite another group, the Business Council on National Issues recently brought together 22 CEOs of major multinationals, all of whom have active year 2000 plans in place. What's more, they all report that they are actively putting pressure on their partners and allies along the supply chain, both domestically and abroad, to ensure that every link is strong.

This is an especially important point, and one often cited by people who say that even if we get our own ducks in a row, we stand at great risk, because other countries are not as far advanced. It is true; Canada is more dependent on its trade than most countries. Two-way trade accounts for more than 70% of our GDP. In one sense that is clearly a vulnerability, except that more than 80% of our exports go to the U.S.A., and almost 70% of our imports come from the U.S.A. Along with Canada, the U.S.A. has been identified as among the world leaders in year 2000 readiness.

By the way, that leadership could also mean a competitive edge for Canadian companies that do solve the millennium bug problem early. The Conference Board suggests that on the basis of the StatsCan readiness data from last October, about 1.4 million jobs may be at risk if no action were taken.

Let me emphasize that last clause: if no action were taken from last October. We believe people and companies are taking action, and we look forward to the next StatsCan survey due this summer to put some empirical meat on our anecdotal bones.

Yes, we expect there will be business failures, and therefore a significant impact on those people directly involved. We are cautiously optimistic, however, that because of the high profile of the issue and the attention paid to it by leading executives, including ministers and committees such as this one, we will put in place solutions that significantly mitigate the impact. It will not be easy or inexpensive, but it is doable, especially for a country such as this, that has a tradition of surviving difficult challenges.

Those were the prepared comments, Madam Chair.

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

Ms. Stephenson, do you have anything to add at this time, or are you just going to participate in the questions?

Ms. Carol Stephenson (Chair (Designate), Board of Governors, Information Technology Association of Canada): I will participate in the questions.

The Chair: Thank you. I'll begin questions with Mr. Lowther.

Mr. Eric Lowther (Calgary Centre, Ref.): Thank you, Madam Chair.

Thank you both for coming and giving us your insights.

I have a couple of quick questions. I noticed, Mr. Duncan, that the group you represent should perhaps have some more insights into this problem than other groups. So much of this is a technological problem.

I was wondering if you knew of software solutions, strategies, or approaches that fit into various levels of the problem. For example, we have the software problem in large corporations, in business software, like the Cobalt business systems. Then we have the integrated chip problem, and the interface problem among large systems out there.

• 1540

I understand that we are beginning to see some software solutions at a PC level and with small business systems. This is where people can come in and run these things. It will do some sort of diagnostics to say, yes, you have to fix something, or no, you're okay, or whatever.

Can you give us some insights into how that's progressing from the software side?

Mr. Gaylen Duncan: Sure. First, there isn't a silver bullet, and our forecast is that there won't be a single silver bullet. That is because it occurs in so many different ways. The software solution will not solve the chip problem, and no one software solution will work on all of the various types of programs that have the problem. That's the first point.

The second point is, yes, a number of software solutions are coming out, and they fall into two categories. There are those that say you have a problem. So effectively it runs tests into the year 2000, and identifies that something is not working.

The second type is those that scan code and identify date locations for immediate change. The reason that's important is that manual scanning of code current runs about $3 a line. We're forecasting that it's likely to rise to somewhere in the order of $6 a line. You're talking about millions of lines of code in large systems. So anything that automates that process is clearly going to bring the price down.

At the moment there is no software solution that is 100% successful in identifying dates.

Mr. Eric Lowther: So if I can just catch you there, you're saying that in the short term we've developed some tools that can alert us to the problem. I guess that's all they do. They alert you to the problem and maybe the location of the problem in the code. But you're telling me that they're not 100% effective. Even at that, you could be missing things?

Mr. Gaylen Duncan: That's right. The good news is that some of the packages that were available two years ago, which operated in such a way that 20% to 25% of the dates would be found, are getting better. I have not heard of anything that is into the 90% range yet.

That's why Y2K projects are unlike any other software development exercise, which usually forecasts something in the order of 25% of the total cost of the project, and 25% of the time of the project to be spent on testing. Y2K projects are now budgeting closer to 50% of their total time and costs to do the testing, because they are not successful in finding the dates, even manually.

Mr. Eric Lowther: Is anybody still developing these software tools? I would assume there's a pretty frantic race to build tools to do the checking.

Mr. Gaylen Duncan: The Gartner Group estimates that this is a $300 billion to $600 billion problem. Every IT company in the world has some project under way to see if they can steal a piece of that total pie by finding a really good solution. As I say, they are getting better, but I have not seen any into the 90% range.

Mr. Eric Lowther: So is there a chance that we're going to use mainly technology to solve the technology problem? I mean, we kind of have this vision of a bunch of people trying to code software, or check through code line by line, or figure out which chip it is in the big system when the lights go off. But it sounds as if there may be some tools under construction right now that would speed this along. Is that correct?

Mr. Gaylen Duncan: When every company goes through the exercise of identifying the extent of their problem and the strategy they should follow to solve it, a number of radically disparate strategies come out.

Some companies are tossing their old systems, are going from mainframe to distributed computing systems, and are bringing in entirely new systems that will be year 2000 compliant. They don't have the coding problem. Others are attempting to do coding review, retain their old systems, and get a longer life out of them. That's where your example will fit. Yes, we will be using more and more technology for people who are following that particular strategy.

Mr. Eric Lowther: I have one last question. You kind of have a mixed message to us here. Part of it is that there's a problem but the sky is not falling. It's bad but it's not really bad. There's trouble but maybe we could fix it. It's kind of a double-edged thing, which is good.

But I wonder if you're not being a bit overly optimistic. I was thinking of one of the other quotes we heard in a committee from one of the senior market analysts in the States, Ed Yardini. He is one of the top fellows down there.

When he first heard about the problem, he said there will be no impact on the American economy. Some years later, it was 40% chance of a recession. Just recently it was 60% chance of a recession due to the year 2000.

Yet I'm hearing from you that the sky is not falling, we're going to fix this, and there's a good chance that we'll avert this. Are you trying to be optimistic, or do you really—

• 1545

Mr. Gaylen Duncan: No, I'm trying to be very practical. A number of people have made a lot of money over the last couple of years by being very pessimistic. There has been a lot of accusations against the IT industry that they are hyping this problem.

I think the role of ITAC in this case is to sample as best we can and report back to you. If there has been no progress—and as I went through in my statement, every indication we have been able to check since October tells us there has been significant progress—if the survey in May and its release in June shows inadequate progress has been made, you will hear a different message from ITAC.

We do not believe that will occur. We believe the numbers will show we are inching our way up to the bulk of the Canadian economy and the bulk of the U.S. economy, and I include governments in that statement as well as the private sector; we are moving and will be all right. I have indicated there will be failures. It is impossible to predict where they will occur and what companies they will affect, but there will be failures.

What I'm saying is that it is not time to go beyond the recommendations in the Monty report and increase government intervention, other than to monitor what action plans are being developed, and monitor carefully. Monitor the results of the next survey. Implement the recommendations—even the government itself is slowly moving to implement its own set of recommendations. And be ready.

I do not believe I am, but if I'm wrong, then come this late summer we will be back here lobbying for not just recommending that regulators take action but that you pass legislation requiring things to occur.

Mr. Eric Lowther: That's great.

Mr. Gaylen Duncan: I appreciate that.

The Chair: Thank you, Mr. Lowther. Mr. Bellemare.

Mr. Eugène Bellemare (Carleton—Gloucester, Lib.): I have nine quick questions that require maybe a yes or no, or whatever.

In the summer of 1998, we are told satellites could malfunction, and of course a variety of enterprises like navigational enterprises could be affected. Obviously you don't send a plumber up there to fix it; it's impossible. Do you believe that's the case we're about to see now?

Mr. Gaylen Duncan: The one area of the economy that worries me the most is international air travel, not because I don't believe the airlines in Canada are not being readied in time, not because I believe NAV CANADA will have a problem, but because I believe there are countries around the world that are involved in the air navigation system that do not have the ability to make the change in time. I believe you're going to see problems in Asia, South America and eastern Europe. I believe now companies are looking at alternate ways of designing the air navigation system so that they can overcome this. But the one thing I would not recommend is taking a flight from Toronto or Ottawa to Asia overflying the polar route anywhere near New Year's Eve.

That's not a one-word answer, but—

Mr. Eugène Bellemare: I appreciate the answer to that.

Today I answered that question to the press. They asked me if I would fly on January 1, and I said no, I'm not going south or north. I'm staying home with a generator and lots of cash.

Mr. Gaylen Duncan: One of my staff who is a Bahamian says what he plans to do is fly to the Bahamas a month before New Year's Eve. He's going to sit on the beach with a string and a pin, because the two things he knows for sure are that the sun will come up and you can always catch fish.

Mr. Eugène Bellemare: The greatest personal fright I have is in regard to the hydro utilities because of the cascading effects it would have on every aspect of any and every operation imaginable, whether it's hospitals, trains, banking, doors opening or locking up, or whatever. Am I right to have that concern, if not fright?

Ms. Carol Stephenson: Maybe I could just mention that the utilities were represented on the federal government's Y2K task force and have been working on this issue for years. I would say they, along with the banks and telecommunications and hydro utilities, were early thinkers about what we're going to do to fix this problem.

• 1550

Every indication that we have from the utilities sector is that they're in about the same situation as telecommunications, and right now we're in the testing mode. Our plans are to have everything tested by probably the fall of 1998, so that we're well in advance of being ready and tested for year 2000. I would say it would be a concern if they just started thinking about it this year, or just started planning this year, but that's not the case with utilities.

Mr. Eugène Bellemare: Given that we are in a grid system in Ontario, Quebec, the maritimes and the northern states, if there is a glitch and you needed to fix the whole system, it's not like the winter storm we recently had, where Hamilton came to help Hawkesbury, Vermont went to help southern Quebec, and so on. Everyone would be sending ambulances to their own shops, as it were.

Ms. Carol Stephenson: I happened to be a Manotick resident during that time, so I resonate with your concern. And it's the same for telecommunications, quite frankly.

Gaylen mentioned that one of our biggest concerns is the international testing that we have to do in advance with countries around the world. We know there will be a dial tone across Canada because the Stentor Alliance is testing that now. We're testing interconnection with our competitors, so we are certainly confident that because we are linked across Canada, things will be in excellent shape.

The part that is the tougher one is all the tests you have to do internationally; you want to make a call to the U.K. or you want to make a call to Asia as well. That is probably more difficult than the domestic piece of it. I think the hydro utilities are facing some similar challenges with their grid networks, but they're doing what we're doing—they're working together. And we also have an alliance with the U.S. to make sure we're testing within North America as well.

Mr. Eugène Bellemare: I would suspect that the systems are probably worked on very properly, efficiently. For the integrated systems, however, they may be looking at them, but because of the interfacing with everything, everyone, everywhere else, the possibility of real breakdown is probably there.

This morning, Ottawa Hydro told me they didn't have to worry about their trucks, for example, because they had no integrated circuits in them. We had some people from the auto industry saying that some automobiles have as many as—if my memory is serving me right—700 different chips inside them. I can't figure out how a hydro truck, with their cherry-pickers and all the rest of their equipment, would have none of these. This is a fantastic piece of equipment that they must have.

What is your reaction to that, your answer?

Ms. Carol Stephenson: In our industry, we've sort of approached it with a triage approach. There are absolutely essential services that must be working perfectly to make sure you get dial tone, for example, or, in the case of hydro, to make sure you get hydro. If you follow the triage theory, there are other elements of our system that are less crucial on that particular day. You'll still get dial tone, but it's less important that—I'm picking an example out of the blue—your call display works exactly at 12.01 a.m. That becomes less important in the testing triage.

Speaking for really a competitive industry that is in the same boat as hydro, my reaction on utilities is that this is the way we are approaching this. We are looking at all the essential services. From a priority perspective, we're figuring out what must be tested when, how you integrate that across the world really, and then how we test it.

One of the ways in which we're trying to give ourselves assurance that essential services will operate is to be ready early. By being ready early, you then have time to test. You have some time if some pieces are not working the way you thought they were going to, despite the best plan.

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I think the bottom line is that there's reason to be concerned, but I think given the essential nature of those industries, those industries got concerned a long time ago and are well along the way toward testing and prioritizing what has to be done.

The Chair: Last question, Mr. Bellemare.

Mr. Eugène Bellemare: How do you really audit that? “I'm happy. I'm good. I'm intelligent. I'm doing the right thing. I'm the engineer; look at the engineering ring. Be happy, Mr. Bellemare, and go to sleep.”

Ms. Carol Stephenson: Well, I wouldn't say you should go to sleep.

Your audit is in your testing. For example, last week we just tested all of the big switching machines across Canada that switch the telephone calls across Canada. The first test, which was several months ago, was done in a lab environment. Then we tested it live. Then we placed real calls.

The way you assure yourself is through what Gaylen mentioned—it's the biggest part of this project—about the testing. It's making sure that things work when real live calls are processed and that you're ready before the D-date so you have time to do that.

The other thing I would say from a private industry perspective is that we're putting an awful lot of emphasis on this project in our companies. This is discussed at every board meeting. We discuss with our board of directors our state of readiness and we show the progress that has been made. An awful lot of the projects that we might like to do are getting deferred because this takes top priority. Everyone in this industry knows that this is job number one. It's the highest priority.

There's also an awful lot of audit procedures going on within companies. We have external auditors coming in and looking at our plans. An awful lot of due diligence is going in to make sure that the directors of our company will not be held liable because of something we have failed to do in managing this problem.

The Chair: Thank you.

Mr. Gaylen Duncan: Don't just listen to the person of whom you asked the question. The recommendations in this report said that the audit community, when they're doing audits, should be reporting to the board of directors on the quality of the program, the plan, and the progress, and that management should be attesting to the securities commissions.

So there's a whole series of external, heavily loaded legal tools that are being brought to bear. I think we're saying that's enough right now. That seems to be adequate. But certainly one of my colleagues in the U.S., who was discussing the response of various U.S. departments, said that they have been less than forthright in the past. That's why the GAO is going in independently in the United States.

We did the same thing in the federal government. We had an independent SWAT team out of Treasury Board go in to every department to assess whether what they're telling them is really the true story.

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

[Translation]

Mr. Dubé, please.

Mr. Antoine Dubé (Lévis, BQ): You said a little earlier, Mr. Duncan, that to your knowledge, suits have been filed against three big US software companies. Could you tell us if such has been the case for some of the member companies of your association?

[English]

Mr. Gaylen Duncan: To my knowledge, we do maintain a watch upon this, and there is no lawsuit filed or pending in Canada.

As for the lawsuits in the United States, we know of four. One was settled very quickly. I believe it was a Detroit store, where any time you used a credit card with the expiry date beyond 2000, it brought down his whole cash machine system. They had to bring the consultants out and reboot it, which clearly was a major disruption. He filed a suit, and that has been settled. We understand that the programs have been fixed.

The three that are pending are class actions. They have not yet been approved as a class action. The first test is whether the court will agree that there is a class of people who have suffered damages. They are all on exactly the same issue and all filed by the same law firm, which is holding itself out as a Y2K specialty suing firm.

These are suits against software developers who have announced that the next version of their software, the next release, will fix the Y2K problem. It will also do other enhancements, and therefore they're charging a fee.

• 1600

The point the class action is claiming is that fixing the Y2K should be a given, should be free, because the product no longer does what it's supposed to do, and you should separate the Y2K piece from the other functionality. I happen to think that's probably a very legitimate claim and I think that's been a bit of packaging on the part of those three companies; they're trying to make money from a situation that they shouldn't have tried to. I believe those suits probably will succeed.

[Translation]

Mr. Antoine Dubé: Do you think that there are still companies in Canada who are selling packages and products that are not year 2000 compliant?

[English]

Mr. Gaylen Duncan: Yes, I believe there are packages and products still being sold, but I believe that in the large majority of cases they will be upgraded in time. If there is a concern, it would not be with packaged software but with specially developed software that was sold a couple of years ago and where the vendor has now gone out of business. That's perhaps one of our more vulnerable areas. I do not believe this is a very large problem because those companies never did grow to become major suppliers. But it is an issue.

[Translation]

Mr. Antoine Dubé: Yes, but if this is still happening— May be they are selling used hardware between companies who are not necessarily members of your association. Allow me to make an analogy here with the contaminated blood issue. If we were sure that what is being sold and distributed now is compliant, this would put our minds at rest. But if the process is going on, the problem worsens.

Do you think the government, the federal government in that case, should make regulations providing a penalty for such violations?

[English]

Mr. Gaylen Duncan: There is in the civil law, but no, I do not believe that selling Y2K non-compliant products is a crime.

The kind of product where this is occurring would be—and I don't want to pick on a single vendor—with somebody who is selling a particular package globally and realizes that he has millions of installations that have to be fixed and have to work the first time. They don't have a chance to make a mistake. I haven't yet heard of any major vendor of software packages claiming that they are Y2K compliant.

[Translation]

Mr. Antoine Dubé: I was given an article dated Saturday April 18 in which there is a list of software that might cause problems and that are still being distributed. Even Windows 95 could be affected. So that means that, even if problems exist in a big company as that one, they could also exist in many smaller companies.

What could we do to avoid it? If we cannot punish by law, what else can the government do in that case?

[English]

Mr. Gaylen Duncan: At this stage, I'm not recommending that you do anything in terms of intervention in the economy.

Now that you've mentioned the article, I do not believe Windows 95 is yet compliant, but I can guarantee you that Microsoft is testing right now to make sure that it will be compliant, because its customer base would rise up in a single class action suit that would be worth billions. That's what I meant when I said there are some products that have been sold globally for which the solutions are still being developed.

I have no doubt, though, that the companies that they represent, because they are the major players in the industry, will make the grade in time. There will be a fix in time. A current example is that the most recent release of Norton Anti-Virus has now made it Y2K compliant. We knew this was coming. We just knew that until it was perfectly tested on all the various types of machines that Norton Anti-Virus runs on, until that testing was complete, they were not going to release it. It has now been released. I expect a fix for Windows 95 will also be released. That is an area of concern to the user, and I think the vendors are now positioning themselves to get market advantage by saying that all of their products have now been converted. The small, local developer is the one for which we don't know.

• 1605

The Chair: Thank you.

Thank you, Mr. Duncan, Mr. Dubé.

Mr. Lastewka.

Mr. Walt Lastewka (St. Catharines, Lib.): Thank you, Madam Chair.

I really appreciate your presentation here this afternoon, because it's so important to our overall strategy. I want to just go further concerning software and articles still being sold that are non-Y2K-compliant. Are any of your members selling them?

Mr. Gaylen Duncan: Microsoft is a member of ITAC.

Mr. Walt Lastewka: Okay, but you're saying—

Mr. Gaylen Duncan: Microsoft is still selling product that has not been converted, but it has announced that all of its products will be converted.

Mr. Walt Lastewka: When people are selling software—especially in these last eighteen months—is there any code within the organization to make sure the customer who might not be as aware of it understands it is not compliant?

Mr. Gaylen Duncan: A code of ethics, or that kind of thing?

Mr. Walt Lastewka: Yes.

Mr. Gaylen Duncan: No, we don't have a code of ethics. There are announced policies by a number of our members as to when they will have a compliant product. There is a very high degree of sensitivity to the potential for legal liability exposure here. One of the most successful programs we ran over the last year was what the personal liability of a CEO of an IT company is on Y2K-related issues. Let me tell you that I had a large percentage of my members show up, and they clearly understand that what they say to the customer has to be open, frank.

You'll also see a change in language. You don't hear the words “Y2K compliant” any more. What you hear is “Y2K ready”. That was a subtle shift that said product is ready, but what you interconnect to, or what you load on it, may not be. We therefore can't make the bald statement that it's Y2K compliant. If everything you connect to is Y2K ready, then you're Y2K ready.

Mr. Walt Lastewka: You made the comment that, yes, we have problems, but the sky is not falling. We've also been looking at it from the standpoint that we really want to sound the alarm loudly without causing a panic. We've been struggling with how to do that, but it's been more and more evident that people are leaving things to the last. They're forgetting that 50% of the dollars and time will be required for testing and so forth. In fact, we heard from a number of witnesses this morning who are waiting until December 1999.

How do you sound the alarm without causing too much of a panic, yet still be satisfied with your comment that there's a problem but the sky is not falling? You're kind of starting to tell us that in May we're going to sound the alarm if we're not ready.

I don't mean to be an alarmist, but perhaps for some of the people you mentioned earlier—

Mr. Gaylen Duncan: Let me simply restate what I said on the day that Jean Monty released the task force report. I said the orchestra's playing, the iceberg has been hit, and there are inadequate numbers of lifeboats for all of the passengers. The end is inevitable if we don't start taking action. If we do, there is time. There are ships in the neighbourhood this time. That's my firm belief.

What I'm saying in my statement is that the Conference Board of Canada is confirming to us that actions are being taken, more so than last October. The Canadian Federation of Independent Business is confirming that they're seeing a shift in the numbers. Statistics Canada is about to tell us comprehensively what that shift is. Our own sister association in the United States, which is generally regarded as not as ready as Canada, is showing significant shifts in activity. All of the anecdotal pieces of information tell us that people are reacting to the Monty report and to the media coverage, and that things will look differently come May. That's why I'm saying that I have absolutely no single indicator that shows that this trend is not actually occurring out in the marketplace.

• 1610

So, yes, sound the alarm. Continue the hearings. Work with us, with the media, who say, hey, this is an old story, we're tired of it. The answer is that we're not tired of it until we're through it.

Mr. Walt Lastewka: With respect to your association, are there sectors within the Canadian economy that aren't moving as fast, that you would like to highlight?

Mr. Gaylen Duncan: Yes, and again this was highlighted in the Monty report, the Statistics Canada report. The primary resource industries have been the slowest off the mark, and we are certainly using a number of mechanisms through our own members. They have them as clients, and they go in and explain that this is not just a software problem. That's part of the issue.

Your mining equipment in the mine quite likely has date-sensitive chips in it. So get in there and realize that the assessment is not the IT guys doing the assessment. The assessment has to be done by the business people.

Mr. Walt Lastewka: What about resources and materials to make fixes? We're continuing to hear that resources are very tight, there's x number of jobs—54,000 or 56,000—open in the IT area because of the projects going on, plus there is the unique problem of Y2K. Where do we stand on resources and materials?

Mr. Gaylen Duncan: I don't think we have a problem in materials. The only concern I would raise is the speed, particularly for institutions like governments. This is the speed with which they can procure those projects, if the solution is a replacement.

I know that Treasury Board and Public Works are working very actively to make sure that there are some fast-track solutions available.

On the services side they already have— This is in a truly creative RFP that came out just a little while ago. Seven firms have qualified, and committed $100 million each in services to be drawn off the equivalent of what we call a national master standing offer. The U.S. government is now looking at doing a similar exercise. They were astounded by that.

In terms of whether the resources are in the market, I don't think I have a member who is not out actively recruiting right now. Salaries are moving. We predicted that. They're moving about where we thought they would. We are now facing a North American competitive market for people, not just a Canadian market. I'm not sure what is going to happen over the next year in that area, but there will be a shortage of people and a very high rate of salaries paid as we get closer to the year 2000.

The Chair: Thank you, Mr. Lastewka and Mr. Duncan.

Mr. Schmidt, please.

Mr. Werner Schmidt (Kelowna, Ref.): Thank you, Madam Chair.

Thank you very much for coming to appear before us this afternoon. It has been very enlightening.

But I am sitting here listening to you, and the longer I listen, the more convinced I become that you have a mixed message, and it's very mixed.

That bothers me very much. It tells me that the people out there who listen to you and others like you, who are supposed to be the gurus, the knowledgeable people— How are they now to determine how they should reorganize their organization so that they can come through with a clear message—one message—which means we are ready for the year 2000?

The particular difficulty I see is that everybody is going to be demanding services and equipment from exactly the same sources as exist now. The wave is building, and it's building exponentially. As a consequence, though, the resource isn't growing exponentially.

So how can you say this problem is doable?

Mr. Gaylen Duncan: You've sent several signals. Let me start with the first one.

To you, I am giving a double message—absolutely. Everything appears to be on track. We are on time, on schedule. The numbers are moving in the right direction, at the right speed. We recognize that we will never be at the stage of being able to say that everyone in Canada, the entire economy, is Y2K ready. If anyone wants to make that statement, I would be very happy to get them to put it in writing, chisel it on their tombstone, because they'll be the laughing stock of the world.

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What I am saying is that the minute we see a change in that time line, a decline in the rate of moving from awareness to action, we have to do something more than we are doing now.

But I'm not seeing any indicators of that. And we do have some litmus tests coming that will confirm— far more substantially then the small surveys that have been conducted since last October. We have a full-fledged StatsCan survey coming.

The message I give to business is crystal-clear. If you are not acting now with a business plan, with an assessment, following the steps laid out in the Monty report if you're a small company, or following the steps laid out in our web page if you're a large company, if you are not doing that now, please get out of business now when you can do so in an orderly manner. If anyone says they're waiting to December 1999, please give me a list of those witnesses.

We have proposed that in the stock exchanges of the publicly listed companies. If they're privately listed companies the banks should be told this is who they're lending money to. That was the whole strategy behind this report: using existing institutions and tools, including ITAC, which is out telling people they must be doing this now.

We tell boards of directors, ask your management team, get the auditors to go in, and verify as well. We tell banks, make it a condition of loans.

Should they immediately leap up and say that anyone who's not Y2K compliant won't get a loan? Wrong. It's one of the risks you assess. If they can still get ready in time, that is one level of risk. If it was Stentor and they hadn't started, I'd be saying find another telephone company.

Ms. Carol Stephenson: Which is not true, by the way.

Some hon. members: Oh, oh.

Mr. Werner Schmidt: I appreciate that. There have been some notable examples that really substantiate where you're at. And then I'm not too concerned about the people who are taking the actions. I'm concerned about the people who are talking as if they are taking the actions, but really aren't.

Even the audits that you're claiming should take place. These audits are not something that happen quickly. They take a long time. They take a long time to prepare, to begin with, and one assumes a certain competence these auditors will have. In fact one assumes they will identify the problems and that action, not merely words, is taking place.

Then there is many a step between those two positions. I'm particularly concerned about the words that are coming out of the chief executive suites. When you talk to the people who are at the level below them, where the actual action is taking place, you find that they give one message when they're talking to their colleagues and there's a totally different message that comes out in the media. They say, “Oh yes, we're ready. We have this plan, we have a contingency plan, this is happening here”, and so on down the line. And lo and behold, when you get to the program writers and the actual installers of the new equipment, they say, “We're not even close to what the guy said we were at”. How do you bring this together?

Ms. Carol Stephenson: Well, speaking from experience, I believe that's where the testing results really help. As I said before when you were asking me how would you really make sure this is working, you have to have a grand plan.

What is the way you really make sure that things will work? It's just plain old grunt work called testing. When you test something and it works— That's what we report on, where the testing is at, and we have failures too. We have things that we test, and they don't work. Actually, you're pleased that you found this soon, so you have time to recover.

So I think every chief executive officer— What we do is look at the test results, as opposed to a plan that just says we'll start here and we'll end there. So you have to get into the engine room.

Mr. Werner Schmidt: It's very interesting, Madam Chair, that we now have confidence in tests. When this study started we asked that question over and over again. We did not find anyone who was prepared to tell us that they had a test that could show that we really were compatible. What has happened between January and now so that suddenly now there is a test that wasn't there before?

Ms. Carol Stephenson: No, that's analogous to saying that you can do one magic test in a telephone system and you know it all works. We're testing this thing component by component. Then we test it again when we put the components together. Then you test again to test between Ontario and Vancouver. It's quite a complex testing procedure, and maybe the reason someone might have said that they couldn't give you a test result earlier was because you actually have to do the work to make the changes before you do your tests.

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Picture a flow chart of work. The first thing we had to assess was what we actually had in this inventory, then what is it, fix it, test it, and then start integrating all the testing. So back a year and a half ago we would not have been in the position to test that we're in now. We were back in the inventory and fix stage, the code stage.

But I would agree with anyone who says there's no singular test where you can just go in and, boom, you know you're okay. It's a very labour-intensive test.

Mr. Werner Schmidt: I don't think we ever intended that.

Ms. Carol Stephenson:

[Editor's Note: Inaudible]

Mr. Werner Schmidt: Well, thank you. I'm not sure.

The other point was that you represent Stentor, which is the telephone company, and you represent the IT, which is the technology thing. It's interesting. I'm really pleased that you're here, because on two separate occasions we had the Nortel and Bell Telephone people before us, and at another time we had the banking community. When we asked the banking community whether we could be assured that all the automatic banking machines and things like that would be working on January 1, and we asked Bell Telephone whether they could assure us that the telephone would be working absolutely, they said no.

Now, the banking machines depend upon the telephone system.

Ms. Carol Stephenson: Right.

Mr. Werner Schmidt: So these two things are contradictory. What do we do now?

Ms. Carol Stephenson: You raised a good point there. I don't want to get into all the technology, but our datafax service, for example, is one that helps the banking machines work, and we have thousands of these things across Canada.

We actually have to go to the banks and say, “What window of testing can we have with you? Can we have between 2 a.m. and 3 a.m. on a Sunday night?” Then they have to release that amount of time to us to do the test to make sure everything works.

You can imagine the schedule required to try to put this all together with all the banks, for example, and ourselves. A year ago we weren't at that stage. I would have answered, no, we can't assure you, and the banks would answer, no, we can't assure you.

What I'm saying now is that in a year we've made progress, where we're now scheduling testing time between the two of us so that we can make sure, and assure ourselves, that these things will work together.

I don't want to lead you too far into the world of confidence, though, because remember that I mentioned the triage thing. We know we will have a dial tone, or none of us will have jobs! But one thing that's very difficult for us is if someone has purchased a piece of equipment. They've put it in some equipment room that they have on the third floor of some office building. They've put in software of which we have absolutely no knowledge. If they don't get in touch with us, it's really hard for us to try to figure out what they might have done to test.

So another thing that the task force recommended, and that the phone companies are doing, is sending out mailings to over 800,000 business customers, saying here is the issue. It's another way of raising awareness for their own business, but it also says you need to work with your suppliers, whoever they may be. We're just one example.

So we're trying to help on the awareness thing, too. But I am sure there will be some piece of equipment that somebody has purchased, or it will be attached to something with something in it. We don't know it's there, and it probably won't work.

The Chair: Thank you, Ms. Stephenson.

Mr. Murray.

Mr. Ian Murray (Lanark—Carleton, Lib.): Thanks very much. I just have one question.

By the way, Mr. Duncan, even though you had a double-edged message, you've been very helpful in clarifying the situation. So it's been really interesting to listen to you—both of you, Ms. Stephenson as well.

The one question I have relates to the number of people who have come to see me in my office offering solutions to this problem. They seem like very credible people. In fact some of them have—at least they say they have—a track record working for some large organizations. The immediate question I have, which I don't normally ask them, is why they aren't out there working on this right now. There are so many people looking for resources that know how to do this.

In any event, they are primarily hoping to get some large government contracts. There are already a number of outside firms working for the government on this.

So my question to you really is, if we or others are being approached by people who say they have solutions to this, should we believe them? How can we assess the qualifications, and indeed, should they already be out there working for somebody if they're coming around knocking on my door right now, this late in the day?

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Mr. Gaylen Duncan: If they've got time to knock on your door, they don't have a solution.

Let me give you an example of how pervasive this problem is and how broad the solutions are—and I'm going to take it right out of the IT world. I'm going to take it into a world that some us, maybe all of you, are familiar with.

Have any of you purchased a tombstone for a parent? Did they carve the name, birth date, and the numbers 19 blank, blank for the living spouse? Guess what? You're going to be buying a new tombstone, or you're going to have somebody chiselling the 19 off the tombstone to put the year 2000 on it, or you're going to have to speak to the living spouse about accommodating you by passing away before December 31.

This is how pervasive this thing is. Nobody has been able to find all of the places in which the 1900-2000 problem is going to occur. There will be some failures, but they won't be the catastrophic failures that people talked about two years ago. We do say there will be a small blip in the economy. It will not be a recession.

Mr. Ian Murray: Would it be fair to say that your members are having an easier time of this just because you tend to represent high-tech companies that can deal with these problems much easier than, say, the mining companies or the oil refineries?

Mr. Gaylen Duncan: Mr. Murray, it's the exact opposite. All of those other sectors of the economy are looking to my members to find the solutions.

We have an accountability regime that takes us throughout the entire economy. It's not that Bell or Stentor has to solve the network problems just for Stentor. If the local loop inside the office, which might have been privately provided, doesn't work properly, who are they going to phone? It's pretty obvious they're going to be turning to the large suppliers of the telecommunications services.

All of my members are worried about going well beyond their own companies and making sure they work with what they would call the user community, which in economic language is all the other sectors of the Canadian and global economies.

No, my guys are the most exposed, not the least exposed.

Mr. Ian Murray: Okay, thanks very much.

The Chair: We want to thank you for coming here today, Mr. Duncan and Ms. Stephenson. We appreciate your comments and your input.

The automotive sector is coming before us on Thursday, so we'll see whether your testing is working or if what you're telling us is really where it's at. We know the economic impact of one automotive strike in the city, let alone strikes across the country.

We'll see if they tell us the same thing you're telling us, and we hope they do.

We thank you for coming. We appreciate the task force work. We're glad for your participation on that, Ms. Stephenson. We're hoping awareness is happening. We're hoping businesses are taking notice and are starting—

With that, we'll call our next witnesses. Thank you very much.

Mr. Gaylen Duncan: Thank you for the opportunity.

The Chair: We'll have a three-minute pause while we wait for our next witnesses.

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• 1631

The Chair: We'll now reconvene the meeting.

Members, they're distributing packages of information. You should have both speaking notes for the RCMP and a package that looks something like this in front of you. If you don't have the package, it's coming.

We're have with us now to continue our discussions on preparedness for the year 2000: from the Department of National Defence, Mr. Howard Dickson, chief information officer; from Emergency Preparedness Canada, Mr. Eric Shipley, executive director; and from the Royal Canadian Mounted Police, Mr. David Morreau, director of the year 2000 project.

I understand that each of you will be speaking. I would ask you to try to keep your comments to no more than five minutes because we are anticipating bells at approximately 5.30 p.m. We will have to leave for several votes, and several members of the committee cannot return. We're trying to finish before the vote begins.

That being said, I will begin with Mr. Dickson from the Department of National Defence.

Mr. Howard Dickson (Chief Information Officer, Department of National Defence): Thank you, Madam Chair and members of the committee, for the opportunity to talk with you.

This is the ninetieth day or the third month, exactly today, of my joining the Department of National Defence. Prior to this experience I spent about 30 years in information technology. My last role was as senior vice-president of operations in technology for the National Trust Company of Canada. I've had some consulting experience with Ernst & Young. I've been with large organizations such as Canadian National and the CIBC.

I believe it was with a bias for some industry-external perspective that the Department of National Defence looked for an external candidate last summer, and I was pleased to have the opportunity to join them, as I indicated in January of this year.

Just by way of introduction, obviously throughout the industry there's major concern over the year 2000. In the financial service industry I was being rudely reminded about the subject when we couldn't make five-year GICs back in 1992. We therefore had a focus that forced us into that activity during that time.

When I went to DND, I noticed that 1995 was when they started to look at the issue of a standard date as we got to the year 2000. A lot of things were happening in DND in 1994-95, and it seems it wasn't really until the middle of last year that we formally approached it.

A year 2000 compliance program was announced by the deputy last summer. More recently an operational revenues program was mounted. We also have a number of external issues we have to deal with.

I'm going to bring you up to date on our status. My colleague from Emergency Preparedness Canada is then going to add some remarks.

As I indicated, the activity formally got under way by a management directive from the deputy chief of defence staff last August. That led to the program management office being put in place, and that's the office that oversees the whole year 2000 program. It provides the year 2000 technical framework, it sets policies, it asks for plans, and it sets schedules. It also has led to a focus on the mission-critical systems.

• 1635

In December 1997 we put into place an omnibus contract for suppliers to help us. You may have noticed that Treasury Board has recently put into place a more comprehensive program, but we have been using this program since December. We have some 13 suppliers and a four-year contract with a $90 million ceiling. As we speak, it is being consumed at about $3 million a month.

Like many of our colleagues in the industry, when we put this program into place, having started on the obvious and having a lot of activity under way, we weren't satisfied that we were necessarily being complete, as we should be.

One of the first steps that gets undertaken by any worthwhile CIO is to ensure full executive leadership for the problem. I cannot claim credit that this is what has occurred in the Department of National Defence on the basis of my joining them. It was well under way when I joined; indeed, at this time the deputy chief of the defence staff has taken very active leadership over the operational readiness program.

We said to ourselves, instead of working incrementally through a large number of revisions to our systems, why don't we look at what's critical to Canada, what's critical to our core purpose, and ensure that we can carry those responsibilities through the end of 1999 and into year 2000?

Lieutenant-General Crabbe, who is our number one soldier when it comes to pulling together operational missions on behalf of the Canadian Forces—you can't have a more senior or finer person than that—has become very, very involved and very energetic in leading the analysis of our operational missions. My role is to make sure he has 110% support from all of my resources, as well as to support other initiatives across the defence organization, particularly within my own area, concerning infrastructure.

At the start of April we put some contracts into place to make sure that operational readiness is clearly defined. We expect by June to have operational impact defined very clearly. We expect that these plans will be turned into detailed transition plans as we get toward September of this year. We expect a year from that time to be validating our mission-critical readiness.

We are communicating with other groups. There's an interdepartmental working group across the government in which our comrade sitting behind me participates. He's our program manager.

I should also introduce Colonel Hug, who is representing the deputy chief of the defence staff here today.

We also participate in the federal-provincial year 2000 working group, and we're part of the PWGSC year 2000 mission-critical committee, which is looking at the government's systems structure. We also have to make sure we have interoperability with our NATO allies and the combined communications electronic accord we're part of.

In terms of the status, when we looked at the number of systems involved, we found initially about 350. That has grown as we do more and more examinations. We have about 60 tasks currently under way. In three areas we have undertaken to replace those systems. Those are the areas of human resources, finance, and supply management.

In the cases of the human resources and finance systems, those implementations are proceeding as we speak, with brand-new solutions that are year 2000 compliant. The supply chain upgrade project has already been updated to be year 2000 compliant in case the new system is not ready at that time. It's a very large project, and we want to make sure that we are not dependent upon its delivery for the supply system to be in full function as we go into year 2000.

There are obviously a lot of embedded situations with major weapons systems, and they're being addressed through various contracts.

Certainly when I looked at the finance industry, I saw we were somewhat slow to the task. I believe we have given senior attention to this.

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Having said that, we are very pleased with the progress we've made on awareness, but I cannot tell you that awareness is complete. We still have to focus on it more strongly, but we are very optimistic that as we get toward the end of May and into June, we will have operational impact defined for the mission-critical areas.

I think the focus we have is not so much to go for 100% coverage, but to make sure we do have 100% coverage of the critical missions and the vital programs we have to support in our role in defending Canada and North America and contributing to international security. That's currently our focus. As I say, we have very senior leadership behind it, and I have the tremendous support of the management of the defence department to make sure it is carried out to satisfaction.

That's really the end of my comments. I will be happy to take questions.

The Chair: Mr. Shipley, were you going to add to his comments? The idea is that everyone will go through their comments and then we'll go to questions.

Mr. Eric Shipley (Executive Director, Emergency Preparedness Canada, Department of National Defence): Thank you, Madam Chairman, and let me echo my colleague's appreciation for having the opportunity to appear before the committee.

I asked that certain material concerning Emergency Preparedness Canada be circulated to the members in advance of this session, and I think it's important to understand the role of Emergency Preparedness Canada vis-à-vis the subject of particular interest to this committee, the Y2K situation.

Emergency Preparedness Canada has no particular skills to bring to bear on the actual dealing with the Y2K problems. As far as the systems internal to our organization are concerned, we have assured ourselves that all of our systems are compliant. We are of course part of DND and dependent on DND systems, like any other part of DND. Mr. Dickson has outlined what is going on there to ensure they are being taken care of.

Our concern, though, on the wider stage with the Y2K issue is, in a nutshell, consequence management. Those of us in the emergency preparedness and response business concern ourselves not so much with the cause of emergencies and disasters but with their management and resolution. Obviously the preferable route is prevention, and that's very much what is being stressed within the federal government, and within our department, with respect to the Y2K problem. We want to prevent the problems from arising in the first instance.

Regardless of what gives rise to emergencies or disasters, and the causes are numerous, the response capabilities have a lot of commonalities. Our entrée into this situation is to in essence monitor the developments as they proceed with respect to the resolutions of the Y2K problems. A little further down the road, as we gather more information about the state of our preparedness and are in a better position to assess the risks of Y2K that might result in serious consequences and would need to be managed, we will be in a better position to do that risk assessment, compare it with the preparations in place to deal with emergencies and disasters of all kinds, and assess whether or not special preparations beyond that are necessary and warranted and what their nature should be.

The Chair: Do you have something, Mr. Morreau?

Mr. David Morreau (Director, Year 2000 Project, Royal Canadian Mounted Police): Yes. Thank you very much, Madam Chair.

It's a pleasure to be here this afternoon and share with you some of the experiences the RCMP has gone through in terms of our preparedness for the year 2000. Let me begin by explaining my role with the year 2000 and the RCMP.

I was appointed by the commissioner last October to take charge of the entire year 2000 project within the force. My mandate is to organize and implement an initiative to make the information systems, hardware, and special equipment throughout all of the RCMP able to operate without problems in the year 2000 and beyond.

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The first priority is to correct all mission-critical systems and to develop adequate contingency plans through the participation of appropriate policies and their directorates. All matters associated with the year 2000 fall under my sphere of responsibility.

On a monthly basis I report directly to the commissioner and his senior executive committee on the progress of the project. I also report to senior management across the force at every opportunity to maintain an awareness and a focus on the project.

The RCMP has declared the year 2000 project to be its number one priority. We have cancelled, suspended, and delayed a number of information technology projects to ensure that we are able to deploy every resource, both fiscal and human, toward ensuring that we will not be adversely affected by the year 2000 problem.

I have a full-time project office committed to managing and directing all year 2000 activity across the RCMP. We have full- and part-time staff in each of the divisions, and in mid-February of this year I held a three-day national year 2000 workshop to promote awareness, consensus, and a concerted and cohesive project management methodology that would be followed across the country. This was a resounding success as we put the project into focus on a national scale and developed an necessary buy-in by everyone across the country.

In early February I asked the Treasury Board Secretariat year 2000 project office to come to the force to re-evaluate the status of the RCMP's preparedness. Last fall we were rated at 9.9% state of preparedness, when other departments on average were at 25%, which is a significant gap. In the intervening four months we rose to 42.8%, when the government average should have been at 45%. To quote the Treasury Board evaluation team, it was a significant improvement.

This was not necessarily attributable to having converted a number of systems. In large part it was organizing and documenting all that we had done and demonstrating we had control over the year 2000 project.

It's important to recognize that we have not just become aware of the year 2000 issue. The RCMP became engaged in the year 2000 work before 1996. New systems were designed or purchased with the year 2000 in mind. Some examples include our violent crime linkage analysis system, or ViCLAS, which is used in investigating violent crimes; the automated criminal intelligence and information system, which is used by most police forces across Canada; and, similar to other federal departments, our new financial system using the SAP software.

In addition, functionality enhancements incorporated year 2000 fixes during system upgrades and a concerted effort to rewrite many of our applications was already under way. For your information, we have declared 16 systems as being government-wide mission critical, and 7 of those are already year 2000 compliant. We also have 19 departmental mission critical systems, and 7 of these are also compliant. In total, 40% of our mission-critical systems are already year 2000 compliant.

At present our plans are to have most of the remaining systems converted and put into production prior to the end of this calendar year. Those that will not be finished—and there aren't many—are scheduled to be completed in early 1999.

The strength of our plan is that the workload is shared across the organization with all of the policy centres responsible for the systems. Informatics certainly plays a major role, but the work is not limited to it alone. Having mobilized the many subject matter experts, the pressures are more evenly balanced across multiple jurisdictions and project management is simplified.

You may also be interested to know that the RCMP plays an active role in many of the year 2000 committees, such as the interdepartmental year 2000 working group, the risk management panel, and the national emergency arrangements working group on emergency orders and regulations. Those groups are looking at, amongst other things, what needs to be done to fix the year 2000 problems should they arise.

I personally am a member of the Solicitor General year 2000 working group, a committee that our minister directed be put in place because of his own personal interest in the year 2000 issues and how they would affect Canada in general. I am also a member of the governance board of the new PWGSC year 2000 contract.

All of these committees allow us to share experiences with other departments to jointly work toward a common goal and to avoid unnecessary duplication and effort.

It's clearly understood and recognized that in the event of any disaster or even any major inconvenience, the public will turn to the police as their first point of contact. In recognition of this factor, the board sponsored the formation of a federal-provincial year 2000 working group, of which I am also a member. This committee will provide the venue for all public sector organizations to come together to harness the necessary resources needed to minimize the impacts year 2000 may impose. By working together we can hopefully minimize the impacts of year 2000 on all Canadians.

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All federal departments share in this responsibility, but in particular the talents and efforts of the RCMP, the military, and Emergency Preparedness Canada have an important role to play. We join operations regularly and share resources and facilities.

This past winter the RCMP was called upon to participate in the ice storm. This gave us an opportunity to once again work together with provincial, municipal, and emergency preparedness staff in a very challenging and rewarding environment.

We've already opened discussions with the British Columbia government's year 2000 project office to understand where they are in their year 2000 preparedness, and we will be engaging other provincial officials in the coming months. Once we understand where the provinces and municipalities are with respect to their year 2000 preparedness, we can then engage in contingency planning to ensure we are able to provide the necessary support to Canadians as a whole.

The contingency planning process will begin this fall, when we have a better understanding of what contingencies may arise. Contingency planning and risk assessments are integral components of our project management methodology and will be executed well in advance.

We know we have a responsibility to all Canadians to be there whenever and however we are required. It is our intention that by sharing our knowledge of the year 2000 with all departments in the provinces and by working together we will be prepared.

I hope this short overview provided you with the information you were seeking. I'd be pleased to answer any questions you may have.

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

Now I'm going to turn it over to questions. Mr. Schmidt, please.

Mr. Werner Schmidt: Thank you, Madam Chair.

I notice we have the Department of National Defence, Emergency Preparedness, and the RCMP, which are three related yet separate areas. We also had the transport department, the agriculture department, and the industry department, of which this committee is a standing committee.

I sometimes wonder, with all of these departments running along with this year 2000 thing and each having its own area, where is the coordination that would avoid the duplication of effort and marshal resources in such a way that they could be efficiently applied to resolve this problem within government departments.

The question is for anyone who would like to answer it.

Mr. Howard Dickson: I believe Paul Rummell, the CIO of the Treasury Board, is doing an excellent job of coordinating the response by all of us to year 2000. He's keeping our feet to the fire, he's making sure we stay focused on this problem, and I think it has been very much his role to raise the awareness of this issue across all of the departments.

I can understand the very real concern about having the same problems solved in every department. Our businesses are somewhat different, and as we move to put operational missions into a state of repair so we can be called upon by Canada to respond, we clearly look at this from the point of view of the military missions we're mandated to be ready for. Our mandate is somewhat different from the mandates of my colleagues in other departments.

We are looking at the problem from the business point of view rather than from a commonality of systems point of view. I don't believe we have a lot of systems in common, although we're all benefiting from the new SAP system for finance and I think a number of us are also using a new system for personnel. Apart from that, I'm not sure there's a lot of commonality.

Mr. Werner Schmidt: I think that's probably right. I think it bothers me just a little bit. If that is the case— but that's the subject for another day, Madam Chair.

Mr. David Morreau: Perhaps I could add to that. Public Works and Government Services Canada has also taken a very active role in Paul Rummell's year 2000 working group.

The interdepartmental working group was formed I think over a year ago. One of its mandates is to ensure we share common information. There is a common PWGSC website, which provides departments with the ability to go in to look at software that's been tested so other departments wouldn't necessarily have to repeat and duplicate it.

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On the real property management side, there is a subcommittee that is looking at that, where there's a commonality of common software vendors who have identified that their elevators are made by Otis—certain model numbers and the degree of certification. We can share in that information. A great deal of work is being done to help eliminate some of the duplication.

Mr. Werner Schmidt: I had several reasons for asking the question here. Firstly, it was a comment you made, Mr. Morreau, in your formal presentation. You commented that all federal departments share in this responsibility. In particular, the talents and efforts of the RCMP, the military and Emergency Preparedness Canada have an important role to play. It's almost as if there's a difference in your relationship with the public— than there is with any of these other people, as if you have some kind of prior responsibility. Is that the correct interpretation?

Mr. David Morreau: No. What I was alluding to there was the role from a planning perspective, whatever happens after the year 2000 and what will possibly require the involvement of the police, Emergency Preparedness Canada and the military. We will be working together. We have a history of having done that. All of the departments working together are solving common problems where we can, but as Mr. Dickson has indicated, we are different. We have different roles, mandates, and different applications in how we manage those.

Mr. Werner Schmidt: May I expand it into a broader area?

We had before us the coast guard just before lunch. We also had before us the aviation council and the groups there and the traffic control models like NAV CANADA. Surely the ships that you manage in DND, the airplanes that you manage in the air force and the kinds of things that you monitor in terms of wiretapping within your particular operation, Mr. Morreau— there seems to be an overlap here.

Surely the things that are happening on the ships in the navy have certain elements in common in terms of positioning them, in terms of navigation, that are no different from those that are run by the coast guard. There seems to be a possibility at least of doing some things together rather than having each one of them running independently.

Mr. David Morreau: Management people have talked to the coast guard about the ships to look at some of the commonality between systems that they use and what we do and how we operate ours. So there has been a sharing of that information.

The Chair: Mr. Dickson, do you wish to add to that?

Mr. Howard Dickson: I indicated that we are participating in a lot of cross-government committees. We do that likely all the time, so I believe that aspect is being addressed. Once we've agreed there's a common risk to be looking at, once it gets around to actually ensuring that we can function, the actual commonality may be less than we would like it to be. Where there is a commonality, obviously we want to make sure we don't duplicate our efforts unnecessarily.

The Chair: Thank you, Mr. Schmidt.

Mr. Bellemare.

[Translation]

Mr. Eugène Bellemare: Madam Chair, my question is for the three groups: National Defence, Emergency Preparedness Canada and the Royal Canadian Mounted Police.

[English]

I imagine you have a schedule for your system showing milestones for tracking the year 2000 compliance. Do you?

Mr. Howard Dickson: We have a schedule at a level of detail that you'd probably find very high level at this point in time. As I indicated, we are seeking to be very clear about the operational impact by June of this year and we would expect to have a detailed plan by September of this year. In terms of getting down to individual dates on individual systems, our plan is not at that stage yet.

Mr. Eugène Bellemare: When do you propose to have it at that stage?

Mr. Howard Dickson: As I indicated, we would have an assessment of the impact by June of this year. We expect to have a detailed plan of our program to be compliant and to be able to be operationally ready we expect to have that together by September of this year.

Mr. Eugène Bellemare: What about the two other agencies?

[Translation]

Mr. Eric Shipley: As regards Emergency Preparedness Canada, we checked that all the systems which belong to us or which we control are in good repair at the moment.

• 1700

However, as I already indicated, since we are part of the Department of National Defence, we depend to a certain degree on the central system, which comes under Mr. Dickson's responsibility.

[English]

Mr. David Morreau: We have a set of very detailed plans by application. We report on a monthly basis to Treasury Board the progress consistent with the Treasury Board reporting requirements and where we are in terms of the percentage of completeness by each phase. I have detailed working plans by application that each of the individual project managers manages and that my central office oversees.

Mr. Eugène Bellemare: Do you have a certification system within your agencies, all three of you?

Mr. Howard Dickson: We have defined a certification process. It would be following that process as we bring systems on board and say that they're compliant.

Mr. Eugène Bellemare: This is all in writing?

Mr. Howard Dickson: Yes.

Mr. Eugène Bellemare: If problems occurred, could I, at this committee, ask for the paper trail to know that you actually did the work and you did not just come here to sing a good song?

Mr. Howard Dickson: I believe we have that paper trail. I don't think I've sung a particularly good song.

Mr. Eugène Bellemare: It was a good song, yes.

On the back-up testing, have you done that?

Mr. Howard Dickson: We have not done the back-up testing in completion. We have put the facility in place ready to start doing the year 2000 testing. As yet, we have not put our systems through that.

Mr. Eugène Bellemare: What's the date for testing and the deadline for terminating the testing?

Mr. Howard Dickson: Quite clearly, if we're not going to be getting the impact together until June and we're not going to have detailed plans together until September, we will be completing testing sometime after that. We're obviously focusing on having them all completed by September 1999.

Mr. Eugène Bellemare: Whoa.

Mr. Howard Dickson: If you think that's a good song, I don't.

Mr. Eugène Bellemare: That's a bad song. You hit a bad note right there.

You're aware of 09-09-99. Do you know what I'm talking about?

Mr. Howard Dickson: No, I don't know.

The Chair: Mr. Dubé.

[Translation]

Mr. Antoine Dubé: I would like to take the opportunity—I know that you will forgive me for digressing—to congratulate the National Defence people for what they did during the ice storm. That was an emergency situation and we could appreciate the good cooperation that was going on at that moment.

But compared to other departments or groups, planning is perhaps— I am not saying that you are the last one, but some groups are may be more advanced than you are in terms of planning. You give me some reassurance. You are properly dealing with it. You have set what you have to do in your respective areas.

However, you might have to respond to emergency situations created by private systems. It's not a matter of knowing whether all this could happen at the same time. But let's talk about those people who appeared before us and who said that we might have a number of emergency situations, not only in some regions, as was the case during the Ice Storm, but perhaps everywhere. For example, the power or gas distribution could be affected. The banks seem to be well organized, but suppose that crooks want to take advantage of the year 2000 problem to try to make fraudulent transactions, by way of information technology or otherwise.

The ice storm gives us a good example of what a lack of organization can do. There is an Act in Quebec that requires municipalities to have an emergency plan, but we could only realize that in many cases, they did not have one.

So many different scenarios can happen it is difficult to plan ahead. You were talking about responding. Are you having meetings to deal mostly with the events that could happen outside your departments, but which you might have to deal with because you are all doing in a way some kind of emergency preparedness? Do you think that the thinking has gone far enough or not?

• 1705

Mr. Eric Shipley: May be I could answer first. I would simply say that at Emergency Preparedness Canada, we are working very closely with our colleagues in the provinces and territories. For example, during the last federal-provincial meeting, the year 2000 problems were discussed. As we talked, we discovered by comparing situations, that this was not the case and that, as regards risk management, the units in some provinces were as aware as others.

We therefore took on the role of coordination of the operations, either through sharing the information or exchanging improved practices, still in the risk-management perspective. This is our way of cooperating actively with our provincial and territorial partners.

Mr. Antoine Dubé: May be I did not understand correctly, but did you say—

Mr. Eric Shipley: This was not the case in all provinces; the situation could be somewhere different in one province compared to another.

Mr. Antoine Dubé: Since we are in a committee meeting, even if it is a little sensible, could you tell us where things are not as advanced in your opinion?

Mr. Eric Shipley: No. This is not really my role, sir.

Mr. Antoine Dubé: I hope it is not in Quebec.

Mr. Eric Shipley: You made a number of comments concerning Quebec.

The Chair: Thank you.

[English]

Do you have something else you wanted to add to that?

Colonel Greg Hug (Special Adviser, Deputy Chief of the Defence Staff, Department of National Defence): Madam Chair, I represent General Crabbe at this gathering. He is responsible for the operations of the Canadian Forces.

To address that previous question, we are giving that issue very serious thought. One of the major concerns we have is that we will have a situation similar to the ice storm in eastern Ontario and southwestern Quebec, multiplied across the country. That, in our case, is a worst-case scenario. And I echo the comments of Mr. Morreau earlier that the RCMP and the military, with Emergency Preparedness Canada do work together on that.

One of the issues we are dealing with in addition to working out the Y2K problems internally within the military and ensuring that our communications command and control systems and all of our equipment does work through that timeframe is to try to identify where there may be problems within Canada on a national basis or on a regional basis that requires the assistance of the military and Emergency Preparedness Canada.

In those instances our main aim is to ensure that we are capable of fulfilling the functions that we would normally be asked to fulfil in support of the civilian authorities. So we are focused very much internally in making sure that our equipment and our people are ready to react. At this stage we do not know what the scope of the problem will be on a national basis.

We'll be starting our contingency planning—and I can assure you that Lieutenant-General Crabbe is taking contingency planning very seriously—in the June/July timeframe, once we have a better understanding of what nationally may not work and what therefore may require military assistance or the assistance of the RCMP.

The Chair: Thank you.

Mr. Morreau, do you wish to add to that as well?

Mr. David Morreau: It's important to recognize that the RCMP provides provincial and municipal policing and your question was about the role with the municipalities.

In my comments I indicated that we have spoken to the Province of British Columbia to look at where they're at. We have a very aggressive year 2000 team in British Columbia, and it is our intention to engage every community in which we provide provincial policing. If they haven't become involved in any contingency planning, we intend to engage them and promote their involvement, because we do not want to be caught unawares and have problems that will cause us problems. So we will be actively involved in that planning and engage our provincial and municipal partners to make sure we're prepared.

• 1710

The Chair: Thank you. Merci, Monsieur Dubé.

Mr. Shepherd.

Mr. Alex Shepherd (Durham, Lib.): Thank you, Mr. Dickson.

Since I asked this question of the coast guard this morning, maybe I can ask a similar one of you. I think it helps people visualize just what it is we're talking about. The HMCS Toronto, one of the ships used in the Persian Gulf, as I recall—is there a list of deficient chips and equipment on board that ship today?

A witness: Colonel Hug is the expert.

Col Greg Hug: The ship has 67 distinct systems that have been tested or been looked at to this point in time, and we have confirmed that 52 of them are compliant for Y2K. There are 15 that we're not sure about yet.

There's another problem that we have with the military equipment. Going back to an earlier question about the intergovernmental cooperation, our weapons systems are fairly unique and not shared in other government departments. There are a number of complicated systems based on electronics within ships, within our fighter aircraft and that type of thing, that have to be checked.

One of the problems we do have is that some of this equipment is manufactured offshore or in the United States, and often we do not get quite the answer we might like to get from the original manufacturer as to whether it's compliant or not. So we have to come up with a method of running the clock forward to test the compliance on it. At the moment we still have 15 systems on the frigates that need to be tested to ensure they are compliant, but at the moment the ships can go to sea.

Mr. Alex Shepherd: So all of the problems in assessing their compliance are in dealing with outside sourcing?

Col Greg Hug: That I could not answer specifically. I know there are 15 systems that still have to be fixed. One of the problems we have throughout the weapon systems and vehicle systems we're using is that some of them are built outside Canada.

Mr. Alex Shepherd: The manufacturers of these equipments are still around, still available—the information is available somewhere?

Col Greg Hug: We are actively checking with them, but it's a time-consuming process when you're checking 1,500 systems across the Canadian Forces. I'm indicating to you that in the case of the ships, approximately 80% of them have been checked and are compliant. We are not sure about the other 15% because they are still being checked, sir. They could be compliant.

Mr. Alex Shepherd: I presume the same argument would apply to tanks, land vehicles—

Col Greg Hug: Yes. Our tanks were built and bought from Germany, for example, so there's a German aspect there. Some of our equipment comes from the United Kingdom—the majority that isn't built in Canada—and a lot of it comes from the United States.

Mr. Alex Shepherd: So once again, the problem remains that you're having difficulty getting access to information to determine whether it's compliant or not?

Col Greg Hug: In some cases we are having difficulty; in other cases it's just a matter of time to go out and ensure that it is compliant.

Mr. Alex Shepherd: Okay, so those are areas where you have difficulty. How are you going resolve it?

Col Greg Hug: If we have some doubt about whether a system will work or not, one of the contingency plans we will draw up is how we operate without that portion of that equipment working. Usually they have redundant systems, back-up systems. In some cases we may be using a less sophisticated back-up system, but the ship will still sail and the aircraft will still fly and be able to do its job.

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

Mr. Lowther.

Mr. Eric Lowther: We've covered quite a bit of ground here, I think. You gentlemen represent the organizations that are going to bear the brunt of whatever fallout comes out of this year 2000. We've heard some horrendous stories in this committee, making the ice storm look like a walk in the park. We've had some pretty dark pictures painted. We've had some that aren't quite so dark. It's been sensationalized. So we're all over the map on this, but ultimately Canadians are going to be looking to the RCMP and the Department of National Defence to keep order. We don't know right now how big a deal this is going to be on that day.

We covered a little bit of this ground, but I didn't quite understand—at this point you are not developing a plan. You're waiting until June or July or something, and then you're going to kick into gear to say now we have a better feeling of how significant this might be and now we can develop a plan. But it seems to me that we are all having the lights come on, and they're going to continue to come on right to the last day, so whatever plan you develop will have to continue to be shaped and refined right to the last day.

• 1715

So I don't understand why we're waiting to start putting these plans in place, if in fact we are, and second, there's this need to continue to refine that plan going forward. As this issue heats up, I think the pressure will come on the organizations that you represent to set the minds of Canadians at ease. People are going to say, are the RCMP ready? Is the Department of Defence— What would we do?

I've rambled a bit, but I'm frustrated that I'm hearing, gee, we're not really talking about contingency plans, we're talking about waiting until we figure out whether this a 3 problem or a 9.9 problem on a scale of 1 to 10. So we're kind of waiting, and I think that might not be a good idea.

Mr. Howard Dickson: The word “wait” is a four-letter word and I have a problem with that. Since joining the department in February I've seen a brand-new action directive very clearly tasking the deputy chief of the defence staff, and through him the operational command, with responsibility for making sure we're mission ready with the year 2000.

Second, I found the year 2000 program management office reporting two layers lower than my good self, but they now report directly to me. This is a red hot issue within our department and we are working like crazy to put in place plans that I agree should already have been there, but they're not. They're being put in place, and we have a large number of people deployed to do that. As I've indicated, we expect to have a good assessment as we get toward the end of May into June, and we expect to have that into a very detailed plan as we get toward the end of the summer and into September. So it's not a question of waiting.

While all that is occurring, we're working with our vendors and making sure that our networks are compliant. We've got a number of infrastructure projects proceeding. We are replacing the finance system and the personnel system, so this is occurring on many fronts. But the sense of waiting—no, I'm not waiting and I don't think my staff are waiting. We are making a lot of progress in terms of increasing the awareness, but we must remember that DND is one of the largest users of information technology in the government, so obviously it's a very large challenge. Putting these plans in place will take a large amount of effort and it will take some time, but waiting? Absolutely not. We're not waiting.

Mr. Eric Lowther: So you're not waiting for some report or something from Statistics Canada to quantify this further?

Mr. Howard Dickson: Absolutely not. This is a very clear problem. Systems have to function as you go through year 2000.

Mr. Eric Lowther: Okay, maybe that was my mistake.

Col Greg Hug: We would like to get some idea of what the impact will be nationally, but we are not waiting to fix our systems internally. On 31 December 1999 or earlier, the military, as required, will be able and ready to respond to requests for assistance from the civilian authorities of this country, but the planning will be more refined as we get more information on what types of problems we may deal with. If it's massive electrical power shortages in the middle of winter, that calls up one problem. If it's a law and order issue and we're in support of the RCMP, that calls up a different requirement. Regardless, we plan to be ready to handle any and all of those within our current capabilities.

We had over 15,000 troops deployed geographically to support the ice storm. If that happens on a scale of 8 or 10 across the country, we do not have 150,000 troops, so there would have to be plans made. Someone has to adjudicate where the priorities go and that type of thing. We want to make sure that our 60,000 can do the job.

The Chair: One last question.

Mr. Eric Lowther: I had two really short ones. Darn, I will have to pick between the two.

I believe Mr. Morreau stated something to the effect of “in the national interests, being able to harness the resources to address the problem.” Could I read that, if need be, in an emergency measures mode we would dynamically move the resources, be they skill sets, police forces, or whatever, and that it would be in a prescriptive mode all over the country? Do I read that you would take civilian and government expertise to move it where it was needed if we had— Is this the kind of thing we're considering at this point? Could that in fact be a reality in an emergency measures mode, that somebody would generally be in charge and move resources around as need be?

• 1720

Mr. David Morreau: Do you think there is much alternative but to do that? The prioritization of what the crisis is and how it must be managed, including the levels of escalation as it unfolds, will be shared probably amongst the three of us. Those plans have to be in place to ensure we are able to respond. The RCMP is definitely committed to ensuring its share of that responsibility will be executed and carried out.

The Chair: Thank you, Mr. Morreau. Thank you, Mr. Lowther.

Mr. Lastewka, briefly, please.

Mr. Walt Lastewka: Thank you very much, Madam Chair. I think I'm going to help Mr. Lowther on the question he was getting at.

We had some discussion earlier about having all three groups ready, in a standby position, before December 1999.

One of the questions I've been asking to various groups, including the one this afternoon, is what sector is your weakest sector? In which province or which area do you already see we're not going to be ready and could have some problem?

What is the procedure? How are you going to find out what sector or what area of the country, on a national scale, will be requiring the deployment or readiness of your three areas? Are we looking at a certain date by which to receive a really good assessment?

A remark was made earlier about our not having 150,000 troops, but that we might need to put the right troops in the right area and the right RCMP resources in the right area because somebody wasn't prepared and so forth. What process are you going through to get it up to a national scale? I think that was what Mr. Lowther was getting at.

Mr. David Morreau: At the federal-provincial working group, when we first met on January 30, the provinces undertook to to go back to the public utilities that are part of their jurisdiction and look at their status. They were also going to get the municipalities to participate.

Here in the Regional Municipality of Ottawa-Carlton, it was only a few months ago that the issue of year 2,000 preparedness came out. A number of municipalities haven't done anything yet.

We will be working together and identifying where the problems are, because our provincial policing and municipal policing roles will be engaging those peace officers in the planning. Each of the divisions will be responsible for it own contingency planning. My office will be responsible for validating and ensuring we've covered everything and then providing overall national coordination. I think we will be working together to solve it.

Mr. Walt Lastewka: I suppose we as parliamentarians want to make sure you're giving enough time to the planning for emergency. That will of course require municipalities and provinces to own up that they aren't prepared. Owning up is something that not necessarily comes easy.

Mr. David Morreau: There will be lots of surprises, unquestionably.

Mr. Walt Lastewka: My next and last question is to Mr. Morreau.

I understand from your background notes that you've cancelled, suspended, and delayed a number of information technology projects in order to keep the priority on the year 2000. On the other hand, knowing the communication or IT work that is going on between the RCMP and many police forces across the country, are we jeopardizing that communications system installation?

Mr. David Morreau: Our communications installations? No.

Communications is a peace officer safety issue. When I say the number one priority is year 2000, it's ensuring we have adequate radio communications in every province. That state of business is paramount to us.

Mr. Walt Lastewka: What type of technology projects have you cancelled or suspended?

• 1725

Mr. David Morreau: An example of that is a new integrated police information reporting system that was going to replace several of our existing systems; that has been put on hold. We are working with the Province of Ontario in the RFP process. The Province of Ontario and nine municipalities are engaged to put that RFP on the street. They are following the federal contract rules. We are part of the evaluation process.

When we are convinced that we have the year 2000 under control and we are happy with where we're going on that— we've made it a part of our RFP that we will be engaging in picking up the IPIRS project and initiating that, but we have put that on hold because it would have been competing with the resources and dollars we had.

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

Ms. Brown.

Ms. Bonnie Brown (Oakville, Lib.): Thanks very much, Madam Chair.

Thank you very much for coming.

One of the phrases that was used earlier was that by the date of January 31 we will be mission ready. What I'm not hearing here is— I don't know if we're imagining what the mission is? Are we imagining the mission correctly?

So that leads me to an example that has been used: the example of the ice storm. The ice storm was a physical phenomenon and it presented physical problems. The personnel who were deployed were, in some cases, not terribly skilled in removing ice, in taking trees off roads, in cutting down dangerous branches. All those were physical problems caused by a physical phenomenon. Then we moved into a medium-skilled workforce, say, the hydro workers who were rebuilding the towers and re-stringing the wires.

My question is what if the crisis does not take place with all these physical symptoms that troops and policemen can be deployed to go and help? What if it takes place in the virtual world? It's things like 1,000 elevators at one time being stuck between floors and filled with people. What if it's 200 planes circling at Pearson because the system is shut down and nobody can land? If it's all within the computer world, what good is it going to be to have all these troops ready to rush off in every direction to save people if in fact the only way they can be saved is by the correction of the system they are captives within?

I also think this whole thing about weapons systems is odd. Are we expecting war? Is that another physical thing we're thinking is going to happen because of this?

I wonder if we have all our ducks lined up in a row, but they're the wrong ducks.

Mr. Howard Dickson: May I just respond quickly and then ask Colonel Hug to make a comment.

There is a very strong planning process within the military; I'm obviously having to learn about it as I join. There was the 1994 defence white paper that very clearly set out what the mission of the defence department was. That has been translated into specific scenarios and missions that we should be ready for. And the major part of the work that is going on at the moment is to make sure we're ready for the most critical ones of those.

Perhaps you'd like to supplement that, Colonel.

Col Greg Hug: Thank you, sir.

There are some things that may occur with Y2K that the military is not geared to cope with or is not the best organization to assist. If there are 200 planes circling Pearson, I can't see the military doing much to resolve that problem. Hopefully, it's been resolved beforehand.

Going back to the ice storm, we use it as an example because it is in the forefront of people's minds. If there are significant power outages, providing transportation to get people to reception centres or that type of thing, going around and doing the knocking on doors, as was done during the ice storm, is something we can do. I expect there are going to be several incidents that will occur where the involvement of the military is not going to have any value-added aspect to it.

The military cannot solve the Y2K problem for Canada. The military can provide assistance where it's realistic to the civilian authorities, but there are obvious limits that take place there.

Concerning weapons systems, in the grand scheme of things it is not a very high priority with us, and I may have used a wrong example, but I was referring to the frigate when asked about HMCS Toronto.

We do have a requirement to defend Canada. There are some concerns that if Y2K problems occur worldwide, it may create some doubt, some concern, some uncertainty about what may be going on. There may be organizations or individuals that try to take advantage of a Y2K problem, and we are not discounting defending this country as one of our key missions and roles. So we do have to have some of weapons systems working, but in the grand scheme of things we want to make sure we can operate internally within the country as the highest priority.

• 1730

The Chair: Thank you. Thank you, Ms. Brown.

Mr. Dickson, I would ask you to clarify one thing that came up with two other witnesses. We've heard that there are personnel movers that the Department of National Defence purchased recently that will not work or are not year 2000 compliant. It's been raised by two witnesses, so I'd like you either to confirm or deny that and, if it is true, indicate whether we are fixing it or if it has been fixed.

Mr. Howard Dickson: The question will be both systems are not year 2000—

The Chair: Not systems, personnel movers—trucks and vehicles to move personnel in cases of emergency, to bring them into areas. They have an embedded chip that's not year 2000 compliant. That was raised by two witnesses, one today and one a few weeks ago. If not, if you could look into it and make sure it doesn't happen?

Col. Greg Hug: I have heard anecdotally—I haven't seen the exact information—that a vehicle fleet delivered in the past 12 months has a chip in the engine that keeps track of maintenance and when maintenance is done, and on 1 January those vehicles will not work at the moment.

The Chair: Yes.

Colonel Al Conrad (Program Manager, Year 2000, Department of National Defence): I'm Colonel Al Conrad. I'm the program manager for year 2000.

I just want to echo what Colonel Hug said. Prior to coming to this meeting I went to the equipment program managers for the army, navy and air force because I wanted to see how we were doing as a snapshot in time in terms of systems.

When I looked at the army vehicles, most of them were deemed to be probably compliant. The dilemma we have is to prove it. The example you gave in terms of the engine control chips—we know of a Dash engine number where it is a problem. We don't have that specific engine, but we can't discount some of the others. So we're actively trying to get that information. We are aware of it, but as it sits right now, we think we're in good shape.

The Chair: Thank you.

I would like to invite you back to the committee at a later date. We're going to be doing an interim report but we don't believe the issue will be done until February 29, 2000. There are a couple of dates that Mr. Bellemare referred to, such as 09-09-99, which could involve a system error code, January 1, 2000, and February 29, 2000, which the computer won't read as a leap year.

Mr. Shipley, I would also ask you to look at emergency preparedness plans that you have, where Canadians are not dealing with them. For example, I live in the town of Amherstburg. Fermi 2 is a Detroit Edison nuclear reactor. We have a plan, because if it blows we have a problem in Canada. We don't know if they're ready or not, and there is no coordination that we can see to ensure that they are.

Thank you very much. We have to go vote.

The meeting is adjourned.