PACC Committee Meeting

STANDING COMMITTEE ON PUBLIC ACCOUNTS

COMITÉ PERMANENT DES COMPTES PUBLICS

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, November 3, 1998

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[English]

The Chairman (Mr. John Williams (St. Albert, Ref.)): Order. Good afternoon, ladies and gentlemen.

I apologize to the witnesses for being a little late in getting underway, but in the House today we had tributes to our war heroes, those who came home and those who didn't. I think that was a lot more important than any meeting we're going to hold here today. So it was first things first.

Now we're into the orders of the day, pursuant to Standing Order 108(3)(e), resuming consideration of chapter 12 of the April and October 1997 report of the Auditor General of Canada, Information Technology: Preparedness for Year 2000.

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We have as our witnesses today Ms. Linda Lizotte-MacPherson, chief information officer; Mr. Guy McKenzie, assistant secretary for the year 2000 project office; Mr. Richard Fadden, assistant secretary, government operations sector; and Jim Bimson, program director, year 2000 project office.

I understand opening remarks have been distributed, and I presume we're going to start with you, Ms. MacPherson.

Ms. Linda Lizotte-MacPherson (Chief Information Officer, Treasury Board of Canada, Secretariat): Good afternoon, Mr. Chairman, members of the committee. I'm very pleased, and feel very privileged, to be here this afternoon.

As the hon. chairman mentioned, I'm the new chief information officer of Canada, and I bring with me over 17 years of experience.

The Chairman: If I may interrupt, Ms. MacPherson, I notice your opening statement is about eight pages long. We normally try to restrict them to about five minutes. Since it has already been distributed to all members—and I think I'm correct in saying that—would it be possible to ask you to summarize it within five minutes rather than reading it verbatim? I'd appreciate that.

Thank you very much.

Ms. Linda Lizotte-MacPherson: Maybe I could start off by telling you a little bit about how we're organized. Recently, Treasury Board's role has been expanded to include overall co-ordination of all of the government's activities related to year 2000, so we lead the overall year 2000 action plan.

We also challenge departments on a regular basis and take interventions as appropriate.

Industry Canada has the lead in terms of working with the private sector to help them meet their year 2000 challenge. Similarly, the Department of Foreign Affairs and International Trade is co-ordinating Canadian efforts around the globe.

The Minister of National Defence has the mandate of co-ordinating national contingency planning in emergency preparedness, and all departments are responsible for ensuring their own systems are compliant. So there's a well-thought-out structure in place.

Since our May appearance before the committee, we have put in place a stepped-up action plan and have made some significant progress. Today, as a country, Canada actually ranks third in terms of preparedness. That's based on the Gartner Group, which is considered to be the industry authority. We are ranked just behind Holland, after the United States.

In terms of our government-wide mission critical systems, we're now at a level of 64% readiness. That's up from the 43% we reported last May. Some departments, in fact, are nearing completion.

I think you will all agree with me that year 2000 is really a technical problem. It knows no boundaries and it crosses all jurisdictions, so our approach is really very much a comprehensive program with strong leadership, and includes cooperation, planning, and monitoring. We also have the provision of adequate resources.

All ministers and deputy ministers are accountable for year 2000 within their respective jurisdictions, and they all have strong year 2000 project offices established. Federal, provincial, and territorial counterparts meet on a regular basis.

In terms of funding, the commitment by the federal government is well entrenched. The original estimate was $1 billion to $1.4 billion, with $400 million in loans. To date, all loans have been used up, with an additional $40 million being extended. We have identified some additional funding pressures, and we're working with departments to address those.

We also have an innovative procurement contract in place with seven local firms for services up to $100 million. That's been completely exhausted, since it's proved to be an extremely effective vehicle to secure skilled resources.

You may recall that we also committed to strategic intervention, where required, and we have done so in the areas of embedded systems, electricity, risk management, and contingency planning.

In the instance of embedded systems, we actually have established two centres of excellence, one for embedded systems to support buildings and one to support all government laboratories.

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[Translation]

On October 30, we held a workshop on the integrated systems to inform senior managers working on the Year 2000 issue of the best practices.

[English]

In terms of electricity, we continue to meet regularly with the Canadian Electrical Association to monitor the state of readiness, and we will continue to do so.

You may also remember that our goal is to minimize the disruption of services to Canadians. Since risk assessment is key to that, we held a risk assessment workshop in June. We had over 300 participants. We've had a subsequent session on contingency planning. National contingency planning and emergency preparedness are now on the planning horizon. In fact, on October 6 the Prime Minister appointed a national year 2000 contingency planning co-ordinator.

In terms of our next steps, we have an ambitious plan. We are on track with our plan. All departments have been asked to have their mission critical systems ready by December 31 of this year, or to have appropriate business resumption plans in place.

By June 30, 1999, departments are expected to have all mission critical systems tested in a live environment. We'll also continue to meet with the infrastructure service providers, such as the oil and gas industry. We will also continue to work across jurisdictions.

We recognize there's no room to relax. We have an aggressive plan, but we are confident that we will be able to minimize the disruption of essential services to Canadians through the turn of the century. We will also continue to work with the Department of National Defence, in particular.

Richard Fadden will play a key role there in terms of national contingency planning and emergency preparedness.

In summary, we have a comprehensive plan in place. That plan is unfolding as expected. Treasury Board leadership has made a difference, particularly in the last several months, but Treasury Board, Cabinet and Parliament can only steer it so far. Clearly, the departments need to fully engage, and ensure their plans are followed.

We also want to acknowledge the important role this committee has played in raising the awareness within government and with the public. We thank you for the opportunity today to continue to provide information and guidance to us.

Mr. Chairman, we're now prepared to answer questions.

The Chairman: Thank you very much.

Before we move into questions—and I appreciate the summarization of your report—I think we should entertain a motion that the report in its entirety, which includes the “Canadian Federal Government Action Plan for Year 2000”, be appended to the minutes of this meeting.

Does somebody want to move that?

Mr. Lynn Myers (Waterloo—Wellington, Lib.): I so move.

(Motion agreed to)

The Chairman: So the entire report will be appended, as though it had been read into the record.

Mr. Myers.

Mr. Lynn Myers: Mr. Chairman, I had a chance to read the report, and I thought it was very well done. It would have been nice to have the time to hear it, but I understand the pressures of time, as I'm sure the witnesses do as well. It was excellent and well written.

The Chairman: Thank you, Mr. Myers.

Mr. Mayfield, eight minutes.

Mr. Philip Mayfield (Cariboo—Chilcotin, Ref.): Thank you very much, Mr. Chairman.

I also would like to thank you for the report, and I'd like to welcome you to the committee. It's your first appearance, and likely not your last, so I look forward to this opportunity to be with you.

The committee has met with the staff of Treasury Board Secretariat concerning Y2K before, and we have asked to have regular, comprehensive reports. I must say, when this report came, it did not strike me as being particularly comprehensive. The Auditor General spoke of the need for work plans, project management, and this all being in place with tasks, dates and responsibilities, at both the government-wide level and within each department and agency.

To begin with, is this single-page report what you consider to be comprehensive within your group?

Ms. Linda Lizotte-MacPherson: In response to the hon. member's question, the one-page report you have in front of you is merely a synopsis of the key milestones. In terms of the plans within the Treasury Board Secretariat year 2000 project office, I can assure you that we have a detailed project plan with very detailed timelines—

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Mr. Philip Mayfield: Would you be willing to share that with the committee?

Ms. Linda Lizotte-MacPherson: We can certainly provide some—

Mr. Philip Mayfield: Because in the depth of our analysis and questions and concerns, I do believe the committee was looking for something much more comprehensive than this. I would like to ask you if you would commit to reporting to the committee on the progress, on the target dates that are identified in your plan, so that we have an idea of what's going on.

There is an increasing concern being generated about the lack of progress that may be being made. I understand that you are up to 64% or something like that, but that doesn't say a lot about where the pitfalls are.

Attached to this report also is a list of those departments, those government-wide mission critical departments, I presume. It's interesting to see who's at the top. I want to congratulate them, and whoever is involved in this, but I am troubled to see those in group three, “Insufficient Progress”.

I would like to know which of those is at the bottom of the list. Who is least ready for this?

Ms. Linda Lizotte-MacPherson: In response to the hon. member's question, the role of Treasury Board Secretariat is to report overall on the government-wide state of readiness. Individual departments are responsible for reporting their individual progress.

In terms of the level of readiness, you are correct that overall the government is at 64% level of readiness. Each department has an individual plan, and they are all on track.

Mr. Philip Mayfield: Perhaps I can interrupt you. As the chairman said at the beginning, I have eight minutes, and that includes your answers as well as my questions.

At this particular time, we have seen the responsibility that's been cast toward the Department of National Defence, that it be available in a supportive as well as service-supplying role—for example, auxiliary electrical power—to back up the police, and yet I see that National Defence is in this most-insufficient category.

I am dismayed to see that the department that has had this particular responsibility given to it in that category. It concerns me, because I wonder, if they were required to come into action, would they even be able to do that? And if they are, how long would it take them to be able to respond?

Ms. Linda Lizotte-MacPherson: You are correct in that the Department of National Defence has really a dual responsibility. One is to ensure that their systems are ready, and in addition, they have an expanded mandate to ensure national contingency and emergency preparedness is in place.

I would ask my colleague, Richard Fadden, to speak on their progress and plans with respect to national contingency planning and emergency preparedness.

Mr. Richard B. Fadden (Assistant Secretary, Government Operations Sector, Treasury Board of Canada, Secretariat): Before I do that, Mr. Chairman, can I just add to what Ms. Lizotte-MacPherson has said about the preparedness level of the Department of Defence?

It's true that it's not in a particularly enviable situation, but it is also true that the department among all departments and agencies has the largest number of complex systems that need to be fixed. There are any number of other departments that have their own challenges, but those challenges are dwarfed when you compare them with those of National Defence.

In recognition of that fact, the defence department has recently come to the conclusion that they have to triage the various systems that need to be fixed, and develop a system of operational readiness that will enable them to focus their “repair work”, if I can use the vernacular, on those systems and parts of the department that may be required to provide aid to the civil power.

Mr. Philip Mayfield: Now, “triage” is a troubling word, to me, but I'm going to come to that a bit later.

In your opening statement, Ms. MacPherson, you did say that you expected the departments to be ready by December 31, and the testing to be completed by June 30. Is that correct?

Ms. Linda Lizotte-MacPherson: Yes, that is correct.

Mr. Philip Mayfield: Does that mean, then, that even these in the least-prepared category—group three, insufficient progress—will be ready too? Is that your assurance to this committee?

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Ms. Linda Lizotte-MacPherson: As a point of clarification in terms of what departments have been asked to have ready by December 31 of this year, it's to have their mission critical functions ready, or to have a business resumption plan in place. They have additionally been asked to have, by June of 1999, all mission critical systems tested in a live environment. So that's an important clarification.

Mr. Philip Mayfield: About that “live environment”, does that mean they are prepared to test in a live environment on the basis that they're ready to go or does that mean they're going to test and see how ready they are to go?

Ms. Linda Lizotte-MacPherson: Testing in a live environment means you test, including interfaces across jurisdictions, in the real production environment. We're allowing departments a six-month period to do that. They will likely experience some difficulties and they'll have to repair their system.

Mr. Philip Mayfield: When I hear that the banks are already telling their customers that if their computer systems are not compatible, they may not be eligible for loans, and when I hear the lack of assurance that you bring to this committee here, and consider that the federal government is the largest corporate entity in our country, I am dismayed by what you say, and I am disturbed by it. It brings me no comfort at all.

I think that in the detail we have asked for we should have the ability to know which departments are working to capacity in an acceptable way to bring their systems on-line to be compatible, and which are not. I ask you again, which of these departments here are not going to be ready, and which is the poorest performer of the lot?

Ms. Linda Lizotte-MacPherson: In response to the hon. member's question, based on the current work plans and the departments' progress against those work plans, we are confident that all departments will be ready with their government-wide mission critical systems, and will have in place a comprehensive business resumption plan.

The Chairman: Thank you, Mr. Mayfield.

Mr. Harb, eight minutes, please.

Mr. Mac Harb (Ottawa Centre, Lib.): I may not need eight minutes, Mr. Chair.

First, I am somewhat amazed by the alarmist tone taken by my colleague in questioning the witness. I want to say that I don't see it that way in the private sector. I think the private sector is, by and large, way ahead of anybody else, because if we look at small and medium-sized businesses, these people don't use computers that are more than five years old.

Mr. Philip Mayfield: Inside the private sector?

Mr. Mac Harb: You're talking about banks. Small and medium-sized businesses don't use computers that are more than five years old. And banks already—I presume the witness can testify to this—have dealt with the potential problems of the year 2000.

Is that correct?

Ms. Linda Lizotte-MacPherson: In response to the hon. member's question, the banking industry is considered to be the furthest advanced as an industry—and that would be the case worldwide—but they are still working through the problem as well. The majority of banks are not scheduled to have their work completed until midway through 1999.

Mr. Mac Harb: What other private sector companies do you think have problems with the year 2000? Name for me one sector that may have this problem in the private sector.

Ms. Linda Lizotte-MacPherson: I think one of the concerns we have would be with the small to medium-sized enterprises as a whole, that segment. The government has done a lot to raise the awareness. There are programs in place, including tax incentives, small loans, availability of resources to help do assessments, 1-800 numbers, and so forth. However, this does probably seem to be the one area across industry that—

Mr. Mac Harb: For small companies, the oldest type of computer they would have in place more likely would be a 486. For any small business to be able to do business nowadays, they have to have at least a 486, and any 486 now, PC equivalent or whatever, will already be ready for the year 2000.

I think what we have to do here, Mr. Chairman—and I'm not directing this at the witness but at some of my colleagues, and at all of us here—

The Chairman: It's a highly political debate, Mr. Harb.

Mr. Mac Harb: —as a preamble to my next one—is to stop being alarmist. There is no problem when it comes to medium-sized and small businesses in this country when it comes to their computer systems. There is no problem when it comes to the banks. There is no problem when it comes to the private sector.

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What we have here is a situation where the public sector has to be ready for that. I appreciate very much what the witnesses have told us today, that things seem to be in hand in terms of the government departments.

That was just a preamble to my next question, Mr. Chairman.

What I want to ask is this. The last time your board appeared before us, they were going to do an assessment to find out where they have systems that are antiquated or obsolete, or close to obsolete, and junk those systems, replacing them with new systems. They were going to do some sort of analysis to find out what was more economical in the long run—updating an elephant that's almost dead or putting the energy into something that would be new.

I want to find out if anything like that has been done.

Ms. Linda Lizotte-MacPherson: Actually, that is a standard part of the process we're following. Part of it is, first all, identifying the systems, and then exploring the various options, which in some cases means replacing a system with something more up-to-date. So that is an integral part of the process the departments are facing.

Mr. Mac Harb: As a final question—and I don't need the eight minutes—I personally think we would be doing a great service, not necessarily to us as a government now but to future generations, if we, especially the committee in charge of dealing with the year 2000 situation, were just to go and do an across-the-board assessment, saying to ourselves that if any one of those departments, any one of those systems, is on life support, then we'll do the absolute minimum to let it pass that day, from December 31 to 2000, so that at least we wouldn't get in trouble. But we wouldn't invest anything in it. We'd put all of our energy into putting in place new technology.

Otherwise, whether we want it or not, those systems are not going to be around for a very long time. They've been around for 20 years, and in some cases, for 30 years.

So I want to find this out. I don't see anything in that report that has some meat and bones to it, so that I can say to myself, “My god, I'm really happy, they're junking system A and are putting a new system in place”, and feel some comfort. These are the systems that are antiquated, 30 years old, and they're not doing anything with it.

If anybody asks me now whether there's a problem, I really don't know. I don't know the extent of the problem.

Ms. Linda Lizotte-MacPherson: In fact, that is exactly what the departments have been doing. After they inventory the system, they look at which ones to keep and which ones should be updated. Some have been retired completely, and some have been replaced. So that is very consistent with the approach that has been taken.

One other point I would like to make is that our experience is that year 2000 is about much more than just the technology—for example, with the small and medium-sized enterprise. It's not just the PC and the software and the hardware. We also have to think about facilities, embedded chips and their facilities, and so forth.

Mr. Mac Harb: What do you mean, “embedded chips”?

Ms. Linda Lizotte-MacPherson: For example, a lot of elevators would have a chip in them that may be date-sensitive. Those are the types of things we need to consider over and above just the software systems.

That's really the scope of the program we've undertaken.

The Chairman: Thank you, Mr. Harb.

[Translation]

Mr. Sauvageau, you have eight minutes.

Mr. Benoît Sauvageau (Repentigny, BQ): I may not use all of my eight minutes.

It is a pleasure to meet you and to have heard your assessment of the Y2K problem, because I am not an expert. In listening to my Reform colleague, I felt like I feel when I hear certain stories: I am too young to remember them, but they have been told to me. When Orson Welles announced that aliens had arrived, I was almost as frightened, but after the explanations, I am a little less fearful.

You said in your document that 64% of government programs had reached a state of preparedness. In my opinion, Y2K will not be the end of the world.

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Let's suppose that we don't achieve 100 per cent. Could it happen that in certain offices that don't have the chip, program or gadget necessary to achieve 100 p. cent and only achieve 80 per cent, there will be no immediate effect whatsoever and that the problem can be solved in January, February, March or April? This is my first question.

Secondly, we are used to seeing overlap in federal agencies. This problem seems to be solved for the Y2K bug. If it is true, congratulations, because there is often a world of difference between what is written and the reality. Are you also taking the provinces' expertise into account and, if yes, how? The provinces must also have review committees and similar initiatives. Are you also drawing upon private sector expertise, as Mac said? There may be simpler and cheaper solutions elsewhere. What type of communications do you have with the provinces and the private sector?

This is my comment. Thank you very much.

Ms. Linda Lizotte-MacPherson: I would ask Mr. Guy McKenzie to answer the honorable member's question.

Mr. Guy McKenzie (Assistant Secretary, Year 2000 Project Office, Treasury Board Secretariat): Thank you for your question, Mr. Sauvageau.

To know whether departments would achieve 100% preparedness or not, we first of all quickly reviewed the process. Last year, each department was required to submit an action plan. Over the course of the summer, parallel to the action plan, we prepared a risk assessment document so as to be able to develop an emergency plan by the end of 1998. This is presently being discussed with the department. The goal is to identify each of the systems and to complete the operationalization of the systems in June 1999, which would give us six months to deal with unforeseen situations.

In case a department, for whatever reason, could not complete its system corrections on time, there is an emergency plan: we have various systems that could be used. The important thing is not the system, but to provide citizens with the service as quickly as possible. Therefore, there will be emergency plans.

I will give you an easy example. For example, if a cheque printing centre is at risk, we will be able to connect with another printing system elsewhere in the government, so that the citizen will not notice the difference. These are the types of emergency plans that the government is prudently developing.

Secondly, with respect to federal-provincial relations, when we worked on information technologies, we developed integrated systems, embedded systems. We quickly realized that we would have to deal with interface issues. Many federal-provincial meetings were held. Some days ago on a Sunday, we met with all the CIOs in Canada. We regularly hold such meetings. We had meetings with the Canadian Electrical Association, and provincial representatives were invited. Last week, we had a workshop on the integrated systems and the provinces were invited. There will be another meeting in December.

Federal-provincial relations in this field are very smooth, because everybody has the same problem and wants to solve it. With respect to interface, each department must work out the interface of its system with its provincial counterparts. As for coordinating horizontal systems, we are continually working on this with the provinces.

Mr. Benoît Sauvageau: Does the same hold true for the private sector?

Mr. Guy McKenzie: Mr. Sauvageau, we often invite people from the private sector to our meetings: representatives from the electrical companies, the gas companies and telecommunications, which are the major systems essential to our society. They communicate with us and participate fully in these federal-provincial meetings. They make presentations and share best practices with the provincial representatives and us. We exchange information in these workshops.

Mr. Benoît Sauvageau: The objective is to achieve 100% in June 99 to have a six-month period. But, if we were to achieve 90%, for example, except in the critical sectors, with what you have just explained, namely the changes and referrals, could we be operational without too many problems?

Mr. Guy McKenzie: That is the goal. The goal has always been to reduce to a minimum any disruptions in service delivery to Canadians. We are trying to achieve 100% and, if not, to have contingency plans so that the services will nevertheless be delivered.

Mr. Benoît Sauvageau: But the situation is not alarming at the present time.

Mr. Guy McKenzie: We are being very vigilant. We are not resting on our laurels, but we are not alarmed. We are carrying on with what we have to do.

Mr. Benoît Sauvageau: Marvellous. Thank you very much. I shall sleep in peace.

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[English]

The Chairman: Thank you, Mr. Sauvageau.

Mr. Power, eight minutes, please.

Mr. Charlie Power (St. John's West, PC): Thank you. I don't think I'll take eight minutes.

I'd like to have clarification on a couple of points. In your first report of November 1997, the committee recommended that Treasury Board and its secretariat submit a report to the committee on the progress that has been achieved across all government departments and agencies by January 31, 1998. I'm surprised at your reluctance to give a department-by-department breakdown of exactly how ready they are for this year 2000 problem. If some departments are doing exceptionally well and some are being very tardy, why wouldn't this committee have a right to that information?

Ms. Linda Lizotte-MacPherson: In terms of department progress, they are all on track. In the November 1997 report I guess my understanding was that it was before the time when there was a government-wide mission critical. Departments report into Treasury Board on a monthly basis on their government-wide mission critical, and then quarterly thereafter for the non-mission critical.

At this point, the role of Treasury Board is to report on an aggregate and government-wide basis, with individual departments reporting on their individual progress.

Mr. Charlie Power: But don't you think, as I said, the members of this committee, members of the House of Commons, should have the knowledge, if not today, then by maybe January of this year, when your next report might be due, of which departments are doing well and which departments are not doing well, and maybe why? That way we would have an understanding of the parameters of the problem as we proceed toward the year 2000.

Ms. Linda Lizotte-MacPherson: That is not currently something we can make available, but we would certainly explore that. It seems to be of great interest to the group.

Mr. Charlie Power: Just two more brief questions.

In terms of the Department of National Defence, obviously we all have this concern, when you see some of the reports, that they're spending a fair amount of time working on a contingency plan in case there's civil unrest, in case there's massive breakdown in the system, and then you get an undertone there that the Department of National Defence is also maybe the least prepared of all of the government agencies to handle this year 2000 problem.

I mean, are they spending more money and time on contingency planning or on actually solving the year 2000 problem?

Ms. Linda Lizotte-MacPherson: Perhaps I could ask Richard Fadden to speak to that.

Mr. Richard Fadden: I think the Department of National Defence has come to the reasonable enough conclusion that it is going to have to make a series of choices within the department in determining where it's going to spend its time, its money, and its energy.

To give you an example, which the deputy chief of the defence staff gave to me awhile ago, they have to decide whether it's worthwhile spending time, money, and effort making sure that CF-18s are Y2K compliant or whether or not they want to make sure their land-movement fleet is Y2K compliant in case they have to move troops around.

What they're trying to do is to decide internally which of their systems they have to do first in order to enable them to execute their contingency plan.

Within National Defence, in fact, there are two totally different responsibility centres. The deputy chief of the defence staff is responsible for planning the operations that may be necessary to help the civil power, and then the office of the new co-ordinator for Y2K contingency planning is responsible for making sure the defence department's plans fit in with those of all government departments.

The co-ordinator was appointed about a week ago, and they're in the process of ensuring congruency between the two.

Basically, I think it's going to mean that the Department of National Defence is going to have to make a series of difficult choices in order to make sure their most important task on January 1, which is to aid the civil power, comes out at the top of the list.

Mr. Charlie Power: One final question, Mr. Chairman.

The amount of money originally predicted was for a $1.4 billion problem, and $400 million in loans, which has been exceeded by $40 million, or 10%. Do you see significant additional costs to enable government departments to become compliant?

Ms. Linda Lizotte-MacPherson: The original estimate of the $1 billion to $1.4 billion was for the government-wide mission critical functions, and at that time there were 43 of them. There are now 48. So there's some additional funding pressure coming from there.

There is additional funding pressure from embedded systems. As a government, I think we're not alone in really starting to understand the complexity there. So that's a new funding pressure.

Mr. Charlie Power: Has any range of dollar figures been put on this yet?

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Ms. Linda Lizotte-MacPherson: We're currently working closely with the departments, and expect probably within the next two to four weeks to have that captured. There's also a need because of the expanded horizontal mandate of some of the departments in the area of national contingency planning and private sector readiness.

Those are really the three sources of additional funding pressures. We're just working that through with the Department of Finance and the individual departments. So to give you a number at this point would be speculation, but we would certainly be prepared to share that number with you as soon as it's available.

Mr. Charlie Power: Thank you.

The Chairman: Thank you, Mr. Power.

We'll start the second round now. We're down to four minutes per person.

Mr. Mayfield, four minutes.

Mr. Philip Mayfield: I'd like to begin, Mr. Chairman, by asking Ms. MacPherson if she would be willing to table that figure with the committee when it's available to her.

Ms. Linda Lizotte-MacPherson: The figure for the funding? Yes, that could be made available.

Mr. Philip Mayfield: Please.

There are a couple of other questions I would like to ask, but before I lose track, Mr. Chairman, I regret that Mr. Harb does not see the seriousness of the situation. His comments kind of remind me of a comment made at another meeting we were at, in which this Y2K problem was described as simply another means for Mr. Gates to get even richer—

Mr. Mac Harb: It wasn't me.

The Chairman: Remember, we're not interested in across-the-board debates here.

Mr. Philip Mayfield: —and I think that diminishes it.

The other thing is that I made no comment about small business or the banks. My mind would be much more at ease if departments of the federal government were in as good shape as the banks are in.

An hon. member: They are.

Mr. Philip Mayfield: But that's not what the Auditor General seems to indicate in his report, and that's the basis of these questions here.

The supplementary question I want to ask is this. I think it was the OECD web site that said there's been about $2 billion spent already by the federal government, and even more is going to be spent. I don't know if you'd want to verify that figure or not, but what I'm interested in knowing is how much this is going to cost. You must have some estimates about where this is going. Because we've talked about the $1.4 billion, we've talked about the interest-free loans that have been oversubscribed by $40 million. You must have some idea of where this is going in costs.

Could you attempt to say something about that to the committee today?

Ms. Linda Lizotte-MacPherson: I will ask my colleague, Richard Fadden, to respond to that question.

Mr. Richard Fadden: Mr. Chairman, I don't think Mr. Mayfield would be surprised to hear that we ask ourselves that question quite regularly.

Mr. Philip Mayfield: I'm not surprised, no.

Mr. Richard Fadden: To be perfectly honest with you, we haven't come up with an answer. I would like to explain to you why.

One of the reasons is evident from looking at, for example, the web. You have people on the one side who are suggesting that the world as we know it is going to end. On the other end, there are people who think a few home computers are going to stop functioning. There is no national or international definitive assessment on exactly what we're going to be facing. So what we're having to do is to try, on the basis of the information we have, on the basis of good risk management and contingency planning, to come up with a range of figures that will enable us to deal with the issue.

On the government systems side, Ms. MacPherson was suggesting a couple of billion, and I suspect it will be there. The difficulty we're having now is dealing with the contingency planning figure. We have never, since World War II, had a disaster or an emergency in this country that has not been geographically specific. This is the first one we will have had since the war that will be dispersed across the entire country.

Quite honestly, the defence department, the Royal Canadian Mounted Police, and a number of other departments like that are now actively seeking to come up with a figure. We know it's going to be high.

I would be, as Mrs. MacPherson suggests, speculating if I gave you a figure right now. Nobody knows for sure. We do know that if we're going to have to do things like acquire additional generators, move troops, and make arrangements of that sort, we're talking about millions and millions of dollars.

To take a point that Mr. McKenzie mentioned, the embedded system problem, the literature suggests that only about 3% of them are a problem. The difficulty is that we don't know which 3%, so judgements have to be made on whether or not you replace the whole thing or you ignore them.

I'm not trying, in a longish-winded sort of way, to avoid answering your question; I really am trying to explain why providing you with a precise answer at this point in time is virtually impossible.

So I apologize for not being able to give you a concrete answer, but we simply don't have one right now.

• 1635

The Chairman: Your time is up.

Mr. Philip Mayfield: I'd like to come back at the appropriate time, Mr. Chairman.

The Chairman: Okay, and thank you for that.

Mr. Grose, four minutes.

Mr. Ivan Grose (Oshawa, Lib.): Thank you, Mr. Chairman. As usual, I won't use all my time.

I've sat in on some silly committee meetings in my five years here. This has to be the silliest I've ever been to. It should have been the shortest meeting we've ever had. Just ask the question. Are we ready? Are we going to be ready? If we are, then we adjourn the meeting and we're gone. If the answer is that we're not going to be ready, then again adjourn the meeting and get out there and make us ready in time.

We then get on to how much it's going to cost. What a stupid question. It doesn't matter what it costs. If someone said a meteor was going to hit us on January 1, 2000—and it very well might—and then we took a survey of the thing and said it's going to cost too much to shoot it before it gets here.... Do I make myself clear? This is a waste of time. If we find in this meeting that the defence department is behind, that they're not going to be prepared, what is this committee going to do about it?

The Chairman: Are you asking me, or is that a rhetorical question?

Mr. Ivan Grose: We're going to have to go to the defence committee, not here.

I'm sorry that I'm not asking a question here, because I think you people are in a terrible position. You're trying to answer questions that really are irrelevant. It doesn't matter. We have to do this thing no matter what it costs. Get on it and do it! And if the individual departments are not doing it, then what's the point in hassling it here? We go to those committees and tell them to get off their butts and do it. Are you explaining to us that the defence department has special problems? Who cares? If they can't be ready until 2002, isn't that marvellous? It has to be done. Let's stop talking about it and just do it.

The Chairman: So you're suggesting that we adjourn the meeting and let them go back to work, are you, Mr. Grose?

Mr. Ivan Grose: Yes, I certainly am.

The Chairman: Okay, do you want to respond to that, Ms. MacPherson?

Ms. Linda Lizotte-MacPherson: Mr. Chairman, I certainly appreciate the hon. member's comments. I want to reassure this committee that we are confident the government will be ready at the turn of the century to minimize disruption to Canadians. I want to be very clear on that. In addition to coordinating, our role is to really challenge the departments and to take appropriate strategic intervention. If that means working with the departments to help them develop triage plans, we are doing so. I want to assure this committee that we take that role seriously.

The Chairman: Mr. Myers, four minutes, please.

Mr. Lynn Myers: Thank you very much, Mr. Chairman. Unlike my learned colleague to the right, I'm not quite as efficient, with a great deal of brevity, etc.

I want to ask what kind of coordination you have with the municipalities. What are you doing with them? We talked a little bit about provincial and such, but what about the municipal level?

Ms. Linda Lizotte-MacPherson: Mr. Chairman, I would ask my colleague Guy McKenzie to respond to that question.

Mr. Guy McKenzie: So far, Mr. Myers, we have always respected what I can call the line of authority or jurisdiction between the federal and provincial governments. In terms of municipal concerns, we raised that issue with provincial colleagues. In turn, they are dealing with the municipalities. However, last Friday, we spent an entire day dealing with embedded systems. We had people with us from New Zealand, the United States, and Great Britain, as well as provincial colleagues. The Regional Municipality of Ottawa-Carleton was there as well, explaining to us the problems it is facing with embedded systems. So while it is always a bit delicate to deal directly with the municipalities, we make sure that when the municipal concerns and issues are raised and addressed at the federal level, they are also dealt with afterwards by provincial governments.

Mr. Lynn Myers: In response to another question, you spoke a little bit about contingency plans. The point on one of the slides—it might have been slide 12—was made about prudent management, avoiding glitches and minimizing damage and such. Could you just very quickly go through the kinds of contingency planning you have in place and where you see this headed if it is in fact required?

Mr. Guy McKenzie: Absolutely.

As Madam MacPherson mentioned, we are working at limiting disruption to Canadian citizens. That's the goal. However, for whatever reason, if we need to do what we call working around the system and organizing with backup plans, we must plan accordingly. Therefore, we had risk assessment workshops with departments last June. We expected 100 people, but 320 showed up, because they were interested. Why were they interested? Simply because of what my colleague Rick Fadden said. The magnitude of it in terms of it not being a particular geographical location but that it could be anywhere in Canada. That attracted quite a number of people.

• 1640

Therefore, during the summer the departments worked on contingency planning in terms of preparing the risk assessment, which will eventually fit into a contingency plan. Last October 14 we reinvited the departments, because we then had in hand their risk assessments. We shared information, and 420 people from different departments showed up. So it is taken seriously. We're now working on a one-on-one basis with every department and looking at their particular plans, and by December a contingency plan will be prepared.

What is it? Fundamentally, it is simply a backup plan to make sure that if we were to have glitches—and it is possible that we will have glitches—an alternative way of delivering services will be in place and will actually minimize the disruption of services to clients.

Jim was very instrumental in that. Do you want to add anything, Jim?

Mr. Jim Bimson (Program Director, Year 2000 Project Office, Treasury Board of Canada Secretariat): I'd like to add that most of the departments now have contingency plans for normal disruptions of service. It's not something that's completely unfamiliar to them. Generally, they'll take those plans and adapt them for the particular circumstances that could hit them with year 2000. So it's really a part of ongoing prudent management, nothing more.

Mr. Lynn Myers: I'll very quickly ask my next question, Mr. Chairman, because I know my time is running out. The amount of $1 billion has been identified in existing budgets and $400-and-some-odd million over and above that from loans and such. With regard to the money required over and above that, where will that come from?

Mr. Richard Fadden: Mr. Chairman, we are expecting departments to reallocate within their existing resources to the extent possible. This is a national priority, and people are expected to reallocate. To the extent that there is a problem that is serious, and recognized as such by the government across the board, and the departments are unable to do that, the Treasury Board will endeavour to find necessary funding.

Mr. Lynn Myers: Thank you very much.

Can I make a small editorial comment?

The Chairman: A small editorial comment.

Mr. Lynn Myers: Did I hear you say we're third behind Holland and the Americans?

Ms. Linda Lizotte-MacPherson: Mr. Chairman, yes, that is correct, and that's a ranking from the Gartner Group. We are considered to be amongst the leaders. Also, if you compare the scope and complexity of Canada versus Holland, I think that's an even more compelling—

Mr. Mac Harb: Mr. Mayfield didn't hear you. Do you want to repeat that?

Mr. Lynn Myers: Well, I'll repeat it, I guess.

The Chairman: I think we understand that Canada seems to be sitting at number three, which is good, but unfortunately, we're not going to be ready on time, which is bad. I noted, Ms. MacPherson, that you talked about being 64% ready, but when my car is 95% ready and it has no wheels, it's not going anywhere. Unfortunately, I think with many of these computers being maybe 64% ready, the system itself is not going anywhere, because in the year 2000 it's going to fail. Am I right in saying that?

Ms. Linda Lizotte-MacPherson: No, that would not be completely accurate. In fact, 64% of them still could function. That is really the point behind business resumption or contingency planning at the departmental level. It is to ensure that there are work-arounds in the event they're only 95% ready or even if they're deemed to be 100% ready but there's a glitch that has been encountered. So that's why we're increasingly focusing on business resumption and contingency planning.

The Chairman: Now, I understand that the Gartner Group said that about 45% of the time needs to be set aside for testing, 20% for repair, and 9% for implementation. So three-quarters of the work falls into these three categories. Am I right in saying that in the testing phase, because you keep finding these embedded chips, you have to go back to the beginning and retest all over again and this 45% is actually more than 45%?

Ms. Linda Lizotte-MacPherson: No, that would not be accurate. In the testing phase it accommodates for some adjustments. I should also clarify, though, that the testing is really broken down into departmental testing, which would be part of what departments have to have done by the end of December of this year, in addition to live testing.

The Chairman: So you're still confident that the testing portion is 45% of the work to be done, even though they're finding these embedded chips as they go through the testing program.

• 1645

Ms. Linda Lizotte-MacPherson: Yes, that would be correct. In fact, in the case of embedded chips, the testing phase is typically shorter. That's because the real challenge with embedded systems or embedded chips is first to find them. So in fact the awareness in the inventory phases is typically more time consuming with embedded systems. What we can expect to see is that departments with a high number of embedded systems may be slow on the uptake in terms of their progress, and they will make up significant time when they get into the testing phase. That has been our experience.

The Chairman: But doesn't the fact that they're there become obvious during the testing phase and that sends you right back to the beginning again?

Ms. Linda Lizotte-MacPherson: No, that is not the case. They are identified early in the process, and they're often even tested early in the process.

The Chairman: Mr. Mayfield was trying to find out who was at the bottom of the list, and I detect a serious reluctance to come forward with the answer. But I suspect that National Defence is down there, if not at the bottom, then next to the bottom.

Before we get into that, I was looking at your report to the committee with the arrows, and I thought it was a meaningless report, if I may be that blunt. It gave us little or no information as to how ready they were going to be. I'm talking about the June, July, and August 1998 survey results. I would hope that in future when you are reporting to this committee we will have a report that gives us real substantive numbers and dates and that indicates who is going to be ready on time, who is not going to be ready on time, who is having problems, and who needs more money. Is that going to be possible?

Ms. Linda Lizotte-MacPherson: Mr. Chairman, we can certainly look at revisiting our reporting structure in order to better meet your needs.

The Chairman: I'd appreciate it.

When I look at the Braiter/Westcott report regarding the government-wide mission-critical systems and speaking about National Defence, their mission-critical systems are to contribute to humanitarian assistance and disaster relief in Canada within 24 hours, to maintain national search and rescue capability in order to minimize loss of life and suffering, and to respond to requests for aid to civil power in order to restore law and order. But Mr. Fadden is telling us that their problems dwarf everybody else's, and your report tells us that they are if not the worst, then practically the worst. I'm having my doubts that they could even get out of the barracks, far less deploy and help Canadians on January 1, 2000.

Ms. Linda Lizotte-MacPherson: Mr. Chairman, perhaps I could defer to my honourable colleague.

Mr. Richard Fadden: I think, Mr. Chairman, you're raising a range of concerns that are shared within the Department of National Defence. But a large part of aid to the civil power involves simply moving troops to various parts of the country, much along the lines as was done in the case of the ice storm in Quebec, Ontario, and New Brunswick. In order to do that you don't need systems that are as complex as a CF-18 or a frigate. You do need generators, you need a capacity to feed the troops, you need the capacity to clothe them, and you need the capacity to command and control them. You also need the capacity to move them across the country either through an air transport system or in vehicles. Our understanding is that insofar as these requirements are concerned, the Department of National Defence will be able to deliver.

The Chairman: So they can't do much, but they'll be able to do what we need, is what you're telling us, Mr. Fadden.

Mr. Richard Fadden: I'm suggesting that if you look at the entire range of responsibilities the government has given to the Department of National Defence, some of them may have to suffer in order to enable them to respond to this national emergency in respect of Y2K, as is the case, I think, with a number of government departments.

The Chairman: We've talked to DND before in this committee, and it seems rather strange to me that with the hundreds of millions of dollars they're spending on high tech, their high tech is going to fall down because they haven't got their high tech in order. It seems that the military are in serious difficulty from the information I tend to glean from what you're passing on to us.

Mr. Richard Fadden: May I suggest, Mr. Chairman, that the military would share your concern. They believe they have a reasonable timeframe and action plan to deal with it.

But I would just presume to repeat the comment I made at the very beginning. They are dealing with some of the most complex systems within the federal government. If you look at comparable figures with the United States or the United Kingdom, they have similar problems. The military today in the latter part of this century are extraordinarily complex, and they're extremely reliant on technology. They have further to go than most of us in our organizations. They're conscious of that, and I think we're confident they're going to be able to move forward on the mission-critical ones.

• 1650

The Chairman: But in your March 1998 report you said that DND had only completed the awareness phase. In March 1998, only six months ago, they had completed the awareness phase. Have they been hiding their heads in the sand hoping this problem would go away?

Mr. Richard Fadden: I don't think so, Mr. Chairman. They have seriously accelerated their work since then. They have developed a system of operational readiness that will enable them to focus on those mission-critical systems they're going to need to deliver the mission that the government has tasked them with. We believe the Prime Minister's appointment of a national coordinator in the minister of defence's portfolio was an indication of the seriousness with which that department is taking these issues.

They have taken a $100-million loan from the Treasury Board in order to enable them to deal with the variety of systems. They've redeployed internally a large amount of money and a large number of people. I believe it's fair to say we're convinced they are doing as much as they can to be ready in time.

Ms. Linda Lizotte-MacPherson: Mr. Chairman, if I could add to that, I fully support Dick's comments.

The Department of National Defence has put in place a stepped-up action plan. They're not only relying on their own resources, but they've also brought in extensive external resources to augment the team. So we've seen significantly accelerated progress since the February-March timeframe. With the operations readiness program, they believe they are on track.

The Chairman: Turning to the performance reports that the President of the Treasury Board tabled in the House of Commons, last week I think, or the Treasury Board of Canada Secretariat—and you are in charge of the entire government's Y2K focus—we're going to spend billions of dollars on this issue. We know Canadians' lives are going to be disrupted.

We find that on pages 28 and 29 you devote a little over a page to the Y2K problem. Do you feel that's sufficient definition or analysis for presentation to Parliament as far as the Y2K issue is concerned, to have one page in a 71-page document?

Ms. Linda Lizotte-MacPherson: Mr. Chairman, I would like to remind the committee that the role of the Treasury Board Secretariat is really to be the overall coordinator and facilitator of the stepped-up action plan. The individual departments are responsible for ensuring that their department or their agencies are ready. So would expect that departments would also be reporting individually.

The Chairman: The public accounts committee tabled a report for Parliament last year, saying that this was serious issue and that it needed someone to take direction, to take control, to seize the initiative and ensure that all departments were moving aggressively.

Are you trying to tell me that the Treasury Board is still in a coordination and monitoring role, rather than a directive and taking charge role?

Ms. Linda Lizotte-MacPherson: In terms of the expanded mandate, there has been an expanded mandate given to Treasury Board, as well as Industry Canada, the Department of National Defence, and the Department of Foreign Affairs.

The role of Treasury Board is to have overall coordination to address horizontal issues and to take appropriate intervention when required. The departments report to us monthly.

But in addition, Industry Canada has been charged with ensuring reasonable efforts are made to help the private sector meet the challenge. In a similar fashion, the Department of Foreign Affairs and International Trade is coordinating Canadian efforts on an international basis, and the Department of National Defence is coordinating national contingency planning and emergency preparedness. So it is a comprehensive approach that we have in place across government, with the expanded mandates.

The Chairman: In the performance report of the Department of National Defence, I've only been able to find one paragraph, on page 31, dealing with Y2K. We've already heard that their problem is the biggest, the most complex, and they are at the bottom of the list as far as preparedness is concerned. We have one paragraph dealing with Y2K.

It says that the chief information officer—you, Ms. MacPherson—is leading the initiative. You're saying that you are a coordinator with all departments, including DND. They're saying you're leading the initiative. It seems to me we have everybody passing the buck around and hoping it falls on the floor so nobody's holding it on January 1, 2000.

• 1655

Ms. Linda Lizotte-MacPherson: Mr. Chairman, the Department of National Defence document refers to their departmental CIO. Each individual department has somebody who heads up their IT initiative. Individual deputy ministers and ministers are accountable for their departments. I think that accountability is clearly understood.

Clearly, Y2K is a priority right across government, and there is a sense of urgency and an appropriate focus is being placed within all of the departments.

The Chairman: If each department is accountable, what is the penalty for failure to perform on time?

Ms. Linda Lizotte-MacPherson: Well, Mr. Chairman, our goal is to minimize disruptions to Canadians—

The Chairman: But we know there will be disruptions and we do know that some departments will not be ready as much as they should be. If they're accountable, what is the penalty?

Mr. Mac Harb: You're leading the witness, Mr. Chairman.

Ms. Linda Lizotte-MacPherson: Mr. Chairman, departments would have to put in place their business resumption plans.

The Chairman: Thank you.

Mr. Mayfield, do you have any more questions?

Mr. Philip Mayfield: Yes, I have a couple more questions.

Within the Department of National Defence I believe there is emergency preparedness, and we've been talking about the department as a whole. I'm wondering if Emergency Preparedness is better prepared for the turning of the clock at the end of this millennium than the department as a whole. Do you have any assurances about that or any concerns that you'd like to share with the committee?

Mr. Fadden, would you...?

Ms. Linda Lizotte-MacPherson: I'll defer to Dick on that question.

Mr. Richard Fadden: Mr. Chairman, the deputy minister of defence recently decided that for purposes of the Y2K problem, the Emergency Preparedness Canada organization would report to the national coordinator in order to ensure a coherent response on the part of the Department of National Defence.

I think EPC officials would admit that this particular problem is one that goes beyond their regular experience. They've suggested that their capacity to deal with emergencies was stretched by the ice storm, which is not in any way to suggest that they're not equipped to deal with serious problems.

They're an organization that maintains a wide range of contacts with the provinces, and my understanding is that the Department of National Defence intends to fully make use of those. They have regional offices in all the provincial capitals, but they are going to be subsumed under the national coordinator for purposes of Y2K.

Mr. Philip Mayfield: There are some things related to this that make me ask further questions, looking at the triage aspect of this. For example, I read in the newspaper that Red Deer is not going to be putting up Christmas lighting because of a shortfall in generation capacity. It's not as though we're coming at this in good shape right across the country, and it's not necessarily the responsibility of the federal government.

But I'm wondering, in light of the ice storm and the difficulty that was experienced in meeting that crisis, have you isolated areas across the country that you're going to be particularly concerned about? I guess we look at the basic needs of shelter and food for citizens. Are these things that you're looking at carefully so that we have an idea of where to move if things don't work as we hope they do?

Mr. Richard Fadden: Mr. Chairman, the broad approach we're taking is to have prioritized to some degree a variety of essential services, and electrical support is at the very top of that list. Most of this country is fairly far north, and if there is no electricity on January 1, 2000, we have a serious problem. As Mr. McKenzie alluded to a while ago, we've been in regular contact with the Canadian Electrical Association and we've had meetings with the provinces.

The national association in the United States that addresses the question of electrical support in North America is, I think it's fair to say, cautiously optimistic. The various provincial utilities all have contingency plans to deal with the difficulty, and we've been assured by some of them that they expect they'll be on line. What they're doing in some cases is taking some of their facilities off line, moving the clocks forward, and trying to run them as if it were past the year 2000. They're going to try to work their way through the systems one after the other.

• 1700

You then work your way down that list, through the food supply, the transportation system, the financial sector, and so on. Have we worked our way through all of these totally, completely, and identified all the problems? No, we haven't, but we do believe that we, and in particular the Department of National Defence, have in place a reasonable plan to do that.

In Canada, we believe that if we can maintain electrical—not we, because it's not the Treasury Board, but if Canada can maintain its electrical system in operational form on January 1, 2000, most of the problems we're worrying about will go away.

Mr. Philip Mayfield: In working towards preparedness, and thinking about the country that is perhaps best prepared, the United States, I believe Congress has given the President authority to put someone in charge if things come down to a worst-case scenario.

In our preparations, has any contingency such as that been taken?

Mr. Richard Fadden: Mr. Chairman, the approach taken by the United States in this respect is one they take in respect of a lot of issues. For example, some years ago, the President appointed a drug czar.

It has not been the tradition in Canada to do that because of our system of cabinet government. The Prime Minister appointed a lead minister. He has empowered a cabinet committee to deal with the issue. The Treasury Board has the authority under the Financial Administration Act to give direction to the department, if need be.

I guess our response would be that currently, as things are proceeding, the system is working. I believe that prudent planning would lead us to consider, as we get closer to the year 2000, whether some changes in the machinery are necessary, but that would be a matter for ministers on which it would be inappropriate for me to comment.

Mr. Philip Mayfield: Mr. Chairman, is the lead minister the President of the Treasury Board in this regard? I want to hear you emphasize that the Treasury Board has been given authority to give direction to the other departments.

Mr. Richard Fadden: I would point out that that legal authority is found in the Financial Administration Act. It can give administrative instructions to departments.

The Chairman: Thank you, Mr. Mayfield.

Mr. Finlay.

Mr. John Finlay (Oxford, Lib.): Thank you, Mr. Chairman.

I need to ask an information question. I'm looking at page 11 of your report, where you're talking about ongoing monitoring, maintaining pressure, working with provinces, and at the bottom it says “if needed, triage and brokering”. Brokering strikes me as a financial term and triage a medical term. Maybe you could explain what that means.

Ms. Linda Lizotte-MacPherson: Mr. Chairman, in response to the hon. member's question, the terms “triage and brokering” could be redeployment of resources as well—human resources, technical skilled resources—to help out from a departmental perspective.

In terms of national contingency planning, I will ask Dick if he has anything he wants to add.

Mr. Richard Fadden: Only to say, Mr. Chairman, that we believe prudent planning must lead us to make some assumptions to the effect that we will not succeed in making all of the systems functional. That being the case, we're developing a series of priorities with government departments, and that's what we mean by triage. They're going to have to decide which of the three or four or five of their systems are the most important and allocate additional or special resources to them.

Mr. Guy McKenzie: If I may just add to that, brokering means simply that the department that will have completed...it may then have to provide some human resources to address the issue Mr. Fadden just explained to you. If need be, if there is any particular need somewhere, we may have to ask civil servants to do something other than what they usually do. This is what the word “brokering” means in that case.

Mr. John Finlay: Provide special services.

Mr. Guy McKenzie: If need be. If we have computer scientists, for instance, who have finished their job somewhere, they may simply be helping their colleagues somewhere else. That's what it means.

Mr. John Finlay: Thank you.

The Chairman: Mr. Harb.

Mr. Mac Harb: I want to go back to your presentation on page 10, where you talk about the pressure point. You talk about the private sector, and frankly, I want some clarification from you. We already talked about small and medium-sized business. Could you give me an example of a private small or medium-sized business that will be affected by the bug, and how? As we said, you do not find a small or medium-sized business using a computer that's more than ten years old. You just don't. Could you give me one example of where this is really a problem?

Ms. Linda Lizotte-MacPherson: A simple example could perhaps be a garage. They may have a computer system at their front office, but they may also have a security system in place that could be date-sensitive. In addition, they may have some equipment in their garage used by the mechanics to test computer chips on a car. Those could be date-sensitive.

• 1705

So it is much more than just the administrative support functions for the running of the office. It could also be an elevator, so it could affect facilities, infrastructure, and their billing and invoicing system.

Mr. Mac Harb: For the elevator?

Ms. Linda Lizotte-MacPherson: For the elevator. That's correct.

Mr. Mac Harb: I heard building elevator.

Ms. Linda Lizotte-MacPherson: Building elevators. Yes, that's correct.

Mr. Mac Harb: How would that affect the building?

The Chairman: When the elevator doesn't work and you're on the 24th floor, Mr. Harb, you get your aerobics before you start.

Mr. Guy McKenzie: Just think about the elevator, for instance. Even if a company is totally Y2K ready, but they're sitting on the 50th floor of a skyscraper, the elevator contains chips....

Mr. Mac Harb: I'm talking small or medium-sized businesses. I'm not talking about the physical environment where they sit. I want a specific situation, a live situation, so I can say in my constituency, this type of small or medium-sized business—other than the garage and the actual system in it—has a problem and I have to alert them. I need a specific live example, other than the elevator, because an elevator is a physical environment.

Mr. Richard Fadden: Can I comment on that, Mr. Chairman? You mentioned, Mr. Harb, that anybody who has bought a computer over the course of the last couple of years will be Y2K compliant. We wish you were correct.

To give an example within the government, which could apply equally to a small organization and yours, we're buying computers with certificates from the purveyors certifying they're Y2K compliant. They're put through a range of tests and they turn out not to be.

So a small business in your constituency, which might have a relatively new computer that they use for payroll, inventory control, or a variety of other things, may well find that despite a certificate from the vendor, it's not Y2K compliant.

The reason for this, as I understand it—because I'm not a technical expert—is that most large computer manufacturers get their parts from all sorts of places, and they too have vendor certificates, some of which are accurate, some of which are not.

Mr. Mac Harb: Could you give me one example of one computer that had this problem?

Mr. Richard Fadden: I can't right now, no, sir.

Mr. Mac Harb: Could you send me that later?

The Chairman: Your own computer, Mr. Harb.

Mr. Mac Harb: I'm not saying this. I know. But I wanted to get things in perspective. I wanted to say, Mr. Chair, that it's important for us to come to the conclusion that in terms of government, the government is in hand. In terms of the private sector outside, I think it's fair game to say they are taking care of their own problems.

So we have to stop being alarmists, like some of my colleagues here. We have a situation that's very much under control. They manage it as they go along. They have a strategic plan in place, and they tell us by June they'll be ready. I'm happy with that.

But I want to say, just to put it to bed once and for all, that in the private sector there's no such thing as a major problem.

The Chairman: Perhaps some may disagree with that, Mr. Harb, but we'll leave that for testimony to come out at a later date.

Mr. Power.

Mr. Charlie Power: I have a brief comment and a question. It's just a rebuttal to Mr. Grose's comment that all this seems to be a waste of time and that some of the questions that were put to these public officials are somewhat silly or unnecessary.

I think, as an elected official, as a member of the public accounts committee, if I can't ask public officials about how much public money is needed to solve a public problem, then somebody in our caucus certainly sent me to the wrong committee.

This is my question. We understand, Ms. MacPherson, that your predecessor left you a report about the progress he was able to make in his short term in the same office you now hold. We hear that report wasn't glowing in the things he wanted to accomplish or was able to accomplish in the amount of time he was there.

Was your first reaction when you saw that report to say, what have I got myself into?

Ms. Linda Lizotte-MacPherson: Mr. Chairman, I'm not sure to what specific report you may be referring. The reports that were left to me were Braiter/Westcott and the file. In fact, Mr. McKenzie had been the acting CIO for a period of about three months and was also heading up the year 2000 initiative at that time. He provided me with briefings, and I certainly feel comfortable with how I was briefed.

The Chairman: Thank you, Mr. Power.

Ms. Phinney.

• 1710

Ms. Beth Phinney (Hamilton Mountain, Lib.): I apologize for being late. As the parliamentary secretary to the minister of revenue I think I have to make sure we're collecting enough money to pay for all this.

Mr. Philip Mayfield: I notice you're at the top of the list too.

Some hon. members: Oh, oh!

Ms. Beth Phinney: In preparedness, I hope that's where we are.

I've gone to a number of meetings recently with health specialists, and it hasn't sounded very encouraging about how each individual hospital is prepared. They literally have thousands and thousands of pieces of equipment that have to be changed over. They seem to be running into stumbling blocks of not knowing which things have to be changed. There's some problem with the ordering system, whether the federal government gave the instructions to order this equipment or what. So one question is, how we can speed up and make sure our hospitals are equipped?

The other problem I have is with pacemakers. The two newest pacemakers out there are okay, but the old pacemakers are apparently in some kind of trouble, and I wonder if a medical alert has been sent out. Any doctor I've spoken to about this is not aware of it. I don't know how you would do your testing, going backwards and pretending you're later on a pacemaker. I don't think you could pretend to pass the point. I think there must be some other way to test whether pacemakers are working or not, or will be working after that date.

Could I have some answers on both of those?

Ms. Linda Lizotte-MacPherson: Health Canada has been working with provincial and territorial ministers, and they've established a national clearing house that includes all of the medical devices and indicates their level of compliance. They have also been in contact with all Canadian manufacturers, importers and exporters, getting their stated compliance on the system. That information is available on the web site as well, so it's available to hospitals and doctors, and there have been mass mailings as well.

I would also ask Guy to add a few comments.

Mr. Guy McKenzie: This was discussed during federal-provincial forums, and the provinces are also participating in providing information back and forth between the hospitals and the federal government. The clearing house that is organized on the web site right now addresses specifically the point you are referring to about the embedded system in medical devices. It's very precise, but you're right that it's costly. It's one of the big issues, and the clearing house is on the web site right now.

Ms. Beth Phinney: When you talked about the embedded devices, were you talking about the pacemakers or all the equipment in the hospitals?

Mr. Guy McKenzie: I'm talking about medical devices that are used in hospitals to test different vital or physical capacities. They are not necessarily pacemakers; they are all kinds of medical devices in hospitals.

Ms. Beth Phinney: A medical device in a hospital is different from what I'm carrying around in me that might do something on that midnight. Do you have any answer for that, or is special attention being paid to that? Most of us don't have equipment in us, but this is a piece of machine that's inside.

Mr. Jim Bimson: First of all, we should clarify that when we refer to an embedded device, we're not talking about the fact that it's embedded in the body.

Ms. Beth Phinney: No, I realize that.

Mr. Jim Bimson: It's a chip. This database would include the pacemakers and so on, as it would other medical devices. So the information is available, and the doctors in the hospitals would know.

Ms. Beth Phinney: But how am I as an individual to know who to call? My family doctor who put it in might have died and the surgeon doesn't keep track of where all the patients live. How am I as the individual with this old pacemaker in me going to be sure it is okay? Do I have to line up somewhere to get it checked out? At every hospital I've checked, the answer has been the way you people have just looked at each other—nobody knows the answer.

The Chairman: We suggest you line up before January 1, 2000.

Ms. Beth Phinney: I don't have one, thank goodness.

The Chairman: I've checked it out. I thought pacemakers actually didn't have date-sensitive chips in them.

Ms. Beth Phinney: The new ones don't, apparently, but the old ones do. That's what I was told.

The Chairman: Your information is different from what I had. Perhaps we should find these bionic people and let them know their bionic world may turn upside down on January 1, 2000. It's something we need to know. I can imagine the major problems, the individual crises people will have. It may not be a national crisis, but it will be a serious personal crisis if their pacemakers quit at the stroke of midnight, January 1, 2000.

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Ms. Linda Lizotte-MacPherson: I wish to address the concern. Our understanding would be consistent with yours, that even the old ones are not date-sensitive, but we can get clarification on that.

The reason for the national clearing house is really to make sure the information is available to the provinces and the hospitals. As members of Parliament and senators, we would urge you to get the messages out there, share this information, and encourage your constituents to make use of the tools that are in place.

The Chairman: Thank you.

Mr. Grose.

Mr. Ivan Grose: Maybe this could be a summation. Incidentally, I have no quarrel with what Mr. Power said about me. I think he identified what I was trying to do.

I would like to go back to square one, being a simple fellow who just came in here because it was warm and dry after I fell off the turnip truck. This is the public accounts committee. Our job is to examine the public accounts of Canada, as critiqued by the Auditor General. We have wandered far afield on this thing.

If the Auditor General had said the year 2000 thing was wasting money and it wasn't accomplishing anything, fair enough, we would look at the amount of money that was being spent. But we're now into pacemakers. This has nothing to do with us. This is not our thing. I appreciate the patience of these witnesses, because quite frankly I don't think they've been treated fairly. They've been answering questions they shouldn't have to answer here.

Incidentally, I've been called an honourable member four times, I think, and I'm getting nervous. I'm not all that honourable.

But I think we have wandered far afield. If we could come back a little bit, I would be happy.

The Chairman: Thank you, Mr. Grose.

Mr. Mayfield.

Mr. Philip Mayfield: Thank you very much, Mr. Chairman.

The Auditor General in his report mentioned some of the possible legal implications for the government. He mentioned some things that our parliamentary researcher has provided, such as errors in government services and information upon which businesses or the public rely; interruption in services that results in delays causing loss of business; malfunction of products or devices certified by the government; defects, errors, interruption or failure of goods or services regulated by the government.

In your January 1998 report you indicated that 34% of the departments and agencies had not addressed potential legal or regulatory implications of the Y2K problem. What is the current status of planning with regard to legal and regulatory implications in these Y2K problems? What percentage of the departments or agencies have now addressed the issue, and what are the estimated potential liabilities to the federal government? That's out of the Auditor General's report.

Mr. Guy McKenzie: To give you updated information, since last spring the deputy minister of justice wrote to every legal office in the departments. During the summer, a legal risk assessment was carried out by the Department of Justice in every department, and it is still in progress right now. It is expected that by December we will have their report. Then we can probably share it with you.

Mr. Philip Mayfield: Would you commit to tabling that with the committee?

Mr. Guy McKenzie: We suggest you ask the question specifically to the Department of Justice at that point. We don't expect we will need any special regulation at this point, but I don't want to get into too many details.

On the good Samaritan legislation, you saw the report that was tabled with the industry committee. Because our constitutional environment is different from the United States, we cannot apply that, because civil litigation is a provincial responsibility. We are now looking at different aspects of how we can facilitate the exchange of information in federal areas of responsibility. The work is being carried on right now. The legal department is responsible for it, and every legal unit in different departments is assisting in what you're talking about. Some conclusions are coming out of that. Dick might want to add a few details.

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Mr. Richard Fadden: I have one thought, Mr. Chairman, and it is that one of the conclusions of the Department of Justice that I think has been adopted by the pubic service generally is that with respect to the government's regulatory responsibilities, more is better. There was a sentiment at the beginning of this process that if departments and agencies in respect of their regulatory roles didn't take the initiative, they may reduce the liability of the government. The general view now is that every regulatory agency of the federal government is urged to be as aggressive, as open, and as transparent as they possibly can be with respect to the regulated federal public sector. I understand that's taking place across the board.

Mr. Philip Mayfield: Thank you very much.

The Chairman: Thank you, Mr. Mayfield.

I think in summation, this is, as Mr. Fadden pointed out, the first time since the Second World War that we've had a non-geographic-specific crisis—I think that was the word you used—or potential disaster. So it is the first time in 50-odd years that we've had a potential problem of this magnitude. It's the first time we've had a potential disaster or a crisis, whatever the terminology turns out to be, that can be timed down to the millisecond—we know when it will happen. Unfortunately, it happens in the new year when everybody wants to have a party. But that's not the point. It's going to happen on January 1, 2000, if it is going to happen, and we have an obligation to be ready for it. The Auditor General has already brought this to our attention. I believe he will be doing so again, if not in the next report then in a subsequent report.

We appreciate your information this afternoon and your recommendations that members of Parliament perhaps disseminate some information to their constituents. We need some real hard facts brought to this committee and to members of Parliament. Moons and half-moons as to what is and isn't being done, in my opinion, don't quite cut it. We need to have some real facts.

As Ms. Phinney pointed out, you can be 95% ready in a hospital, but if the 5% is your life support, then your life is gone, and that's a crisis for you. In some areas nothing less than 100% effectiveness will be acceptable to the Canadian public, and we have a duty and a responsibility to try to ensure we can achieve that.

Therefore, I expect that the public accounts committee will be asking you back again after we have the next report by the Auditor General to ensure that we can provide as much motivation to you and to the civil servants to be as ready as possible to ensure that services to Canadians are as functional as possible after January 1, 2000. I think on that closing remark we should call the meeting to a close. We look forward to you coming back again.

Ms. MacPherson, welcome to your first time before the committee.

Ms. Linda Lizotte-MacPherson: Thank you.

The Chairman: Mr. Fadden, Mr. McKenzie, and Mr. Bimson, we appreciate you all coming along this afternoon.

The meeting is adjourned.