PACC Committee Meeting

STANDING COMMITTEE ON PUBLIC ACCOUNTS

COMITÉ PERMANENT DES COMPTES PUBLICS

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, February 9, 1999

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[English]

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

Today, pursuant to Standing Order 108(3)(e), we will be considering chapter 20, “Preparedness for Year 2000: Government-Wide Mission-Critical Systems”, of the December 1998 report of the Auditor General of Canada.

Today, as witnesses before the committee, we have Mr. Denis Desautels, the Auditor General of Canada; Mr. Douglas Timmins, the Assistant Auditor General; and Ms. Nancy Cheng, principal, audit operations branch of the Auditor General's office. Representing the Treasury Board of Canada we have Linda Lizotte-MacPherson, the chief information officer; Mr. Guy McKenzie, assistant secretary, year 2000 project office; Mr. Jim Bimson, director general, departmental readiness, year 2000 project office; and Mr. Richard B. Fadden, assistant secretary, government operations sector.

We will start, as usual, with the opening statement by Mr. Desautels, the Auditor General.

Mr. L. Denis Desautels (Auditor General of Canada): Mr. Chairman, my colleagues and I are pleased to have this opportunity to appear before the committee to discuss with you our second audit report on the federal government's preparedness for the year 2000 computer problem.

This subject is not new to members of this committee. You have met on three occasions to discuss the risks of systems errors and failures caused by the past use of a two-digit year code. You've also asked the government for periodic progress reports on its state of preparedness.

In 1997 we focused our first audit on the government's overall state of readiness. At that time, we raised the concern that if the pace of year 2000 work to that date continued, it would likely not be sufficient to make all the necessary changes to the systems and test and implement them so they could continue to function as intended. Since that time, many events have taken place.

The Monty task force led a survey of Canadian business readiness. Through its reports it promoted awareness of the year 2000 problem and helped business prepare for it. The House committee on industry held numerous hearings on the issue and submitted a report to Parliament recommending action on many fronts.

In addition to the three hearings of your committee, which were held on chapter 12 of our 1997 report, your report to Parliament underscored the significance of the year 2000 problem. You not only recommended that we review progress reports submitted by the Treasury Board Secretariat, but also encouraged us to continue audit work on this important subject.

That was one of the reasons for our second audit in 1998. In addition to following up on our previous reports, the 1998 audit focused on the systems that support government-wide mission-critical functions; that is, those that deliver essential programs and provide key services to Canadians.

I am pleased to report we found that the government reacted favourably to our 1997 observations and recommendations. It has recognized the significance of the issue, and departments are giving it top priority. Overall, the pace of year 2000 work has accelerated, and there has also been progress in central monitoring and advancing some horizontal issues. For instance, by July 1998 the government had approved loans of about $365 million to 15 departments and agencies so they could proceed quickly with year 2000 work.

Nevertheless, after analysing the Treasury Board Secretariat's summary of the June 1998 survey results, we remained concerned. According to milestones set by the government, year 2000 work on systems ought to have been at least 50% complete by June 1998. However, nine departments and agencies responsible for 18 of the 48 mission-critical functions had completed 50% or less of the work needed to make the systems compliant. The secretariat considered a progress rate of 60% or more at that time to be good, and only four departments responsible for seven mission-critical functions met that criterion.

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I would like to remind the committee we are dealing with a list of mission-critical functions for the government as a whole. Each and every one of these functions is considered important to Canadians, otherwise they would not have made the list.

The situation is also more complex than meets the eye. Over 1,000 systems support these 48 mission-critical functions. Moreover, there are many more systems that are department-wide mission-critical; that is to say, they may not be critical to the government as a whole, but they are essential to departments and agencies so they can continue to carry out their mandate in their usual fashion. The central monitoring and the reports produced from that activity do not cover these particular systems.

[Translation]

The government's deadline for final testing and implementation of compliant government-wide mission critical systems is June 30, 1999. It allows six months for departments and agencies to deal with slippage or unexpected problems that may arise. I should also note that some systems supporting the government-wide mission critical functions have target dates for completion later than June 1999.

In the 1998 audit, we identified six mission critical functions for examination. We selected and assessed the readiness of some key systems that support the six functions. The functions are inspection for food safety and plant and animal health, emergency assistance and support, the delivery of income security programs to Canadians, First Nations transfer payments and trust funds, border crossing services for commercial goods and law enforcement services.

Assessing the systems using data as of June 30, 1998, we concluded that several key systems and subsystems supporting three of those functions remain at risk of not becoming fully compliant before 2000. They are the inspection services for food safety and plant and animal health, income security programs—more specifically the Canada Pension Plan component, and law enforcement services. We found the risk to be lower or not significant for some of the key systems supporting the remaining three functions. I should emphasize that we did not assess all systems supporting the six functions. Also, it would be inappropriate to generalize our findings to the state of year 2000 work in the six departments.

Mr. Chairman, our findings were based on information as of June 1998. The status of year 2000 work is very dynamic, as it should be. Last month, Minister Marcel Massé announced that the government's rate of progress on systems supporting mission critical functions had reached 82% in December 1998. In December, I received a letter from Human Resources Development Canada, indicating that the Canada Pension Plan system—one of the systems that we concluded was at risk as of June—had been fully tested and received internal certification.

The auditors and I are pleased to receive the news. But it begs two important questions: how should one interpret this information in a broader context, and does the Auditor General's concern still stand?

We can take comfort in the fact that the pace of year 2000 work has picked up even more since our 1998 audit. However, one cannot infer from this that the final 18% will not run into any unexpected hurdles. The Treasury Board Secretariat recently released a report on government-wide mission critical progress. It reflects progress as of December 1998 and the Secretariat plans to update this report monthly. The report shows that not all departments and agencies are progressing at the same rate. Where there are stragglers, further attention and close monitoring may be required. This report also provides more detail than was contained in previous progress reports to this committee. We believe that it provides a good basis for members of the committee to be kept informed of year 2000 progress in departments that are responsible for mission critical functions for the government as a whole. Mr. Chairman, the committee may wish to use this report as a starting point and explore further how it could be made more meaningful for your committee.

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[English]

In my office, we are cautiously optimistic. We are encouraged by the accelerated pace and progress and by news, such as the certification of the Canada Pension Plan system. We remain guarded because slippage and unexpected problems can occur, and the last 10% can be difficult to achieve on a timely basis.

Even the government acknowledges there will be glitches come January 2000. For those reasons I believe it would be prudent to act upon the audit recommendations we made in our 1998 report.

We recommended that the government continue its focus on the year 2000 as a top priority and that the Treasury Board Secretariat consider intervening strategically, as appropriate, and take strong action such as triage, if warranted. In order to ensure continuation of essential programs and services, contingency plans should be developed and tested in advance.

We also recommended that the secretariat develop a work plan for common horizontal issues that remain to be addressed.

In my view, the seriousness of the year 2000 computer problem is real, and even with the accelerated progress to date we must not become complacent. No efforts should be spared in bringing the problem in check.

Time is of the essence and we do not have a lot left, but we do have 325 days before 2000. If we devote our full efforts and also have contingency plans in place and tested, there is no reason why essential programs and services cannot continue without interruption.

In my office we continue to view the year 2000 computer problem as a priority issue, and we're planning to start the third audit. I expect to bring that report to this committee in November. If we identify specific risks during the audit, we will bring them promptly to the government's attention when there may still be time to address them. By the time our report is tabled, we hope few issues will need to be addressed before 2000. The ultimate objective should be to ensure that all essential programs and services continue for the public at large.

Mr. Chairman, that concludes my opening remarks. My colleagues and I would be pleased to answer the committee's questions.

The Chairman: Thank you, Mr. Desautels.

Now we'll turn to Ms. Lizotte-MacPherson for an opening statement by the chief information officer. Ms. Lizotte-MacPherson.

Ms. Linda Lizotte-MacPherson (Chief Information Officer, Treasury Board Secretariat): Good afternoon, Mr. Chairman and members of the committee. Thank you for inviting us here today. I'm pleased to provide you with an update on the progress being made on the federal government's year 2000 preparedness.

At the last appearance, you will recall I indicated we had intensified our efforts and we had put in place a stepped-up action plan across all departments. Today I'm pleased to report that our collective efforts are paying off. In fact, as of January our overall government-wide mission-critical functions stood at a readiness level of 84%. That's up 34 percentage points since the Auditor General conducted his examination of year 2000.

In fact, key functions such as old age security, employment insurance, the Canada Pension Plan, and the customs border systems are already year 2000 ready.

[Translation]

Additionally, we have acted upon all the recommendations of the Auditor General's report—and I would like to take advantage of this opportunity to thank Mr. Desautels for his contribution to year 2000 preparedness.

[English]

We have also undertaken strategic interventions on horizontal issues. For example, in the area of embedded systems we helped to create seven centres of excellence across Canada, one under the leadership of the Canadian Food Inspection Agency and six under Public Works and Government Services.

The report also recommended the development of contingency plans. To date, all risk assessments and the majority of business contingency plans for government-wide mission-critical functions have been completed. Treasury Board Secretariat is currently reviewing these plans and we're providing feedback to departments. If need be, we will make strategic interventions.

[Translation]

We also strongly recommended that all departments undertake independent reviews of their plans and progress. Fifteen departments have already done so.

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[English]

Members of this committee, along with the Auditor General, also recommended to us the broader dissemination of detailed information on federal preparedness. As a result, some 10 days ago we posted on our web site a detailed progress report on federal preparedness. This information will be updated monthly and made available to the public.

We have also undertaken several other proactive communication initiatives. For instance, Industry Canada launched this week the year 2000 preparedness week. A consumers' home guide is currently being delivered to over 11 million homes across Canada. It provides Canadians with year 2000 information on common household appliances and electronic equipment, as well as providing them with a five-layer test for personal computers.

The year 2000 challenge is an issue that transcends all jurisdictions. Consequently, we've been actively working with all our stakeholders. We held three federal, provincial, and territorial workshops so far, and more are planned. In addition, over the last couple of months we have travelled across the country meeting with senior provincial officials and with senior regional officials, sharing best practices and information, and putting the foundation in place for further collaborative work. We also heard about municipal preparedness at one of our federal-provincial-territorial workshops. We are actively encouraging information sharing to facilitate federal, provincial, territorial, and municipal readiness.

We have also received updates on key infrastructure industries from the Canadian Electricity Association, the oil and gas industries, and the Canadian Bankers Association, and we will continue to monitor the preparedness of these key industries and work cooperatively with them to share information.

The year 2000 issue also transcends borders. Consequently, we have established with the U.S. a joint working group to address cross-border issues such as electricity, transportation, and customs and immigration. We are also working very closely with the G-8, the United Nations, and other international organizations.

With respect to contingency planning, work is also progressing according to schedule. The national contingency planning group, or NCPG, is currently coordinating the development of a national-level contingency plan with particular focus on Canada's key infrastructure. NCPG will take into account year 2000 planning that's being done by federal departments, portfolios, other levels of government, the private sector, and other countries. Meanwhile, the Department of National Defence is readying Operation Abacus's efforts.

I think you will agree with me that we have accomplished a lot since our last appearance. While we are encouraged by the progress made, we cannot guarantee that there will be no disruption. However, we are confident that our efforts will minimize the impact of potential disruptions of essential federal services to Canadians.

[Translation]

In conclusion, I would like to leave you with some words from the President of the Treasury Board:

The year 2000 problem will test our ability to work together as a diverse and dynamic society: public and private sectors, federal and provincial governments, large corporations and small enterprises, major cities and isolated regions. Y2K is everybody's problem.

Thank you Mr. Chairman. We are now prepared to answer any questions you might have.

[English]

The Chairman: Thank you very much.

Now we'll turn to Mr. Mayfield for eight minutes. Mr. Mayfield.

Mr. Philip Mayfield (Cariboo—Chilcotin, Ref.): Thank you, Mr. Chairman. It's a pleasure to be with you and other members of the committee again. I regret that I've come with a bug, so I won't be shaking your hands today, but happy new year to you all, and thanks for being here today.

The Chairman: If you're feeling not too bad, Mr. Mayfield, then we know it's not a Y2K bug that you had, but I know it's serious.

Mr. Philip Mayfield: I'm relieved to hear that. Thank you very much.

I was interested in the information package that was presented today here. I believe this is the second one we've received, Mr. Chairman. I believe the first one came last fall. As I looked through the first one, it was two or three pages and really did not address very directly the concerns and the questions or the requests that we put for information to come back. And I must say, Mr. Chairman, that while this report is somewhat longer, a couple of pages longer, it really tends to gloss over the kind of information that I would really like to see in some substantive form.

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We have for a long time listened to the Auditor General here in Ottawa talk about the seriousness of the problem, perhaps some of the consequences of the problem, if we don't deal with it. I believe this committee has a responsibility on behalf of Parliament to understand and make recommendations to Parliament. I just don't believe this is the kind of information we can use to make the kind of report that Parliament would expect from us on this. I want to begin by saying I had hoped for something more in depth.

I have been busy in this myself since going home for the Christmas break with people in the constituency who are concerned about this issue. I have spoken a number of times on this issue to those who are interested. My concern, however, is twofold. One is for those who are looking for information on how to deal with the problem, but perhaps more seriously are those who still haven't got the idea that this is a very serious problem at all. I'm sure as you travel the country talking about this you've come across some of the same dynamics.

For example, Mr. Auditor General, in one meeting the RCMP, a staff sergeant, a commander of a local detachment, was there, and I took up with him the information you had provided to us and your concern for that department. He brushed aside that information quite casually, saying that the information they had was that their department is entirely ready and there is no problem. He was concerned that I was perhaps scaremongering simply by presenting information I had received from you.

I'd like to know what Treasury Board is doing and what the leaders in dealing with this problem are doing to meet that kind of problem. I see this kind of casual reference to the Y2K problem as perhaps making it more difficult for others to really understand how serious it is, and they should begin to look at it from a personal perspective. I wonder if you could comment on that, please, and understand your responsibility in playing down how important it is with reports like this.

The Chairman: Ms. Lizotte-MacPherson.

Ms. Lizotte-MacPherson: Mr. Chairman, in response to Mr. Mayfield's question, I want to state that the federal government takes year 2000 very seriously. It is clearly a top priority for us. The document that has been provided is really a very small synopsis of the detailed report that's been made available to the public through our web site. In fact, at the end of January we published a comprehensive report outlining the government's overall state of readiness, with all of our departments. I can certainly make this report available to you, or it is available on-line through the web. It's also updated on a monthly basis. In addition, there has been a household flyer that has been sent out to over 11 million homes—

The Chairman: I think, Ms. Lizotte-MacPherson, that Mr. Mayfield is saying you have a responsibility to report fully to Parliament as well, and I think that was the essence of his question—right, Mr. Mayfield?

Mr. Philip Mayfield: Indeed it is. I'm concerned about this report of yours to this committee here. I consider this to be an inadequate report. I feel empty-handed when I take this kind of information to people who are saying “What are you so concerned about?”

Ms. Lizotte-MacPherson: Mr. Chairman, this information had been sent prior to distribution on-line; it had been sent through the committee as well.

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The Chairman: I apologize for interrupting, Mr. Mayfield, and I know you're not feeling too well today.

I think the saying is the total amount of information contained in the package is minimal at best, and Parliament is not being kept fully informed of where the Y2K issue is at. We all agree it's important, and we know you consider it to be important, but Parliament is being kept in the dark because of the minimal amount of information you are providing to us.

Ms. Linda Lizotte-MacPherson: I stand corrected. We do provide a monthly update to the committee, and this information is now available on-line. MP kits were also provided to senators and MPs in the new year.

Mr. Philip Mayfield: Mr. Chairman, I'd like to ask you, in what form do we receive a monthly report? I don't recall that.

The Chairman: I don't think we have received a monthly report, Mr. Mayfield. There is certainly the web site where the department communicates with the country at large, but as far as communicating with this committee is concerned, what you have is what we've received.

Ms. Linda Lizotte-MacPherson: We would certainly be prepared to provide a hard copy of the report on a monthly basis to members, if that's deemed appropriate.

The Chairman: Okay. Thank you.

Mr. Philip Mayfield: May I encourage you, please, to give us in-depth, current information in your reports that we can use? I consider myself to be part of a network, in getting the information out that people need to know. People are concerned about themselves, their income, how they relate to the government, whether their automatic deposit cheques are going to be in, and I have to know that.

Before I leave that, I would like a commitment from you to provide the kind of information to the committee that we have been asking for since we first began to meet with Treasury Board officials on this problem.

Ms. Linda Lizotte-MacPherson: Mr. Williams, we can certainly provide a hard copy. All this information is available on-line, including the detailed comprehensive report and comprehensive guidelines and recommendations for Canadians. In addition, as I mentioned, there has been a household flyer, but we can certainly provide the chair with a hard copy for the committee on a monthly basis.

The Chairman: Thank you. I'll distribute that when we receive it.

Mr. Philip Mayfield: I'd also like to ask Ms. Lizotte-MacPherson, in your opening statement you briefly mentioned that Treasury Board Secretariat is reviewing the departments' contingency plans. I'd like to know when you expect that review to be completed. I'm aware of a previous contingency plan that has had some circulation and is hopefully not current now. But I'm wondering if you would be able to share with the committee the results of that review.

Ms. Linda Lizotte-MacPherson: Perhaps I could defer that question to Mr. Bimson.

Mr. Jim Bimson (Director General, Departmental Readiness, Year 2000 Project Office, Treasury Board Secretariat): We're in the process of reviewing the first wave of contingency plans we've received. We have 19 out of 23, with four more to come. We expect to have finished a review and a first feedback to the departments by the end of March.

We've already begun to meet with departments to discuss what we've seen in their contingency plans. So it is advancing quite well and we'll certainly be able to provide a synopsis to the committee.

The Chairman: Thank you, Mr. Mayfield. Your time has expired, so I'll come back to you in another round.

Mr. Philip Mayfield: Thank you very much.

[Translation]

The Chairman: Mr. Perron, you have the floor.

Mr. Gilles-A. Perron (Rivière-des-Mille-Îles, BQ): Welcome, ladies and gentlemen. Thank you for coming.

Like my colleague, I have some concerns. In your report you mentioned that 15 departments have already carried out an independent review of their plans and state of readiness. Which departments have not acted on these recommendations?

You haven't given us much to chew on except this written report. We're not interested in what the departments have already done, but rather what they are doing and what still needs to be done, so that we can put pressure on these departments to ensure that they will be ready for the year 2000 when the year 2000 arrives.

Mr. Guy McKenzie (Assistant Secretary, Year 2000 Project Office, Treasury Board Secretariat): Mr. Perron, I realize in listening to your questions that the information that we have put on our web site has not, unfortunately, reached the members of this committee. We are going to correct this situation by sending you the monthly report that we publish. You will then see that out of the 24 departments that we have been following—we are following 23 departments plus the Canadian Broadcasting Association that has just been added—20 have reached a level of 80% readiness and the four other departments are progressing nicely. You will realize this in reading the information that is available to the public at large.

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That probably answers your question; the level of preparedness is constantly changing and at this point in time 20 out of the 24 essential services have exceeded the 80% level.

Mr. Gilles Perron: I would like to put the following question to my friend Mr. Desautels. Will the other 20% be dealt with? An 80% level has just been mentioned. Do you personally feel that the remaining 20% will be taken care of by the time the year 2000 is upon us? Will we be able to do this in time?

Mr. Denis Desautels: Mr. Chairman, I said earlier that I was optimistic about our ability to deal with problems in with government-wide systems by the 31st of December if we continue to work as seriously as we are today.

Mr. Gilles Perron: Ms. Lizotte-MacPherson, you said in your report that you are working closely with departments and other levels of government, the territories, provinces and municipalities.

You also mentioned in your report that you are in touch with the Canadian Electrical Association and the oil and gas associations.

I would like to know what you think of the state of these relations. Is the contact good? Will these associations be ready on time? What is the relationship you have with other levels of government and Crown corporations?

Mr. Guy McKenzie: We have very friendly relations with the organizations you have referred to and the federal government. During the year 1998, we held several general federal-provincial meetings, or forums, that the provinces and territories attended. Furthermore, my colleagues and myself have travelled throughout Canada to meet officials on a more personal level. We have used these opportunities to exchange information regarding better practices at both levels of government and we agreed on holding forums. For example, on the 17th of this month we will be meeting again to talk about one particular issue, communications.

In terms of the bigger associations, even though we do not have jurisdiction as such over the Canadian Electrical Association, we have a very good relationship with them. Every time they published an important report, such as the one they published a few weeks ago, they told us about it. We have ensured a similar type of follow up with the Canadian Petroleum Association and gas distributors, as Ms. Lizotte-MacPherson said earlier on.

We are also talking with the Americans and Mexicans, we have had bilateral discussions with our neighbours to the South and trilateral discussions with officials representing the United States and Mexico. We've used various forums.

Thus, overall, our relations are more than good. The exchange of information is open and we keep each other and others up to date regarding our progress, for one very good reason: we depend upon each other.

You mentioned earlier on the remaining 20% for our internal systems. People often focus more on interfaces when internal systems are concerned. However, it is the dependency between systems that is important, and that is why we have been so interested in these open relations with larger associations that you refer to.

Mr. Gilles Perron: Are they just as far ahead as the government, that is to say at a level of 80%, more or less?

Mr. Guy McKenzie: You know, in this field we never speak for others. It's enough work to speak for ourselves. Honestly, what I would say is that their reports are public, they're available, and that information regarding the progress of banks—that we have been in constant touch with—of the Canadian Electrical Association, as well as telecommunications associations, is available in the newspapers. Without giving you a number, I can tell you that we are very hopeful that they will meet their goals. They doing very rigorous work.

Mr. Gilles Perron: Thank you, Mr. Chairman.

[English]

The Chairman: Thank you.

Now we'll turn to Ms. Phinney for eight minutes.

Ms. Beth Phinney (Hamilton Mountain, Lib.): I have two questions. One of them is about putting the two reports together. The Auditor General said he studied six functions. One of them was food safety and plant and animal health. He said it is not up to par and remains at risk.

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When I look at this chart on the monthly report by department, it says Health Canada is at 69%. I guess that means 69% readiness for the year 2000.

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

Ms. Beth Phinney: Does the difference between 69% and 100% ready represent only food safety and plant and animal health, or are there other areas under health that are not ready? What percentage would this food safety and plant and animal health be?

Mr. Jim Bimson: Actually, food safety is under the Canadian Food Inspection Agency, and they are now at 81% readiness. So they're separate from Health Canada.

Ms. Beth Phinney: Could you tell me which areas of Health Canada are not prepared?

Mr. Jim Bimson: They're the internal systems at Health Canada, the ones that monitor the work in the health protection branch and so on, and some of their embedded systems. Health Canada does expect to have—

Ms. Beth Phinney: You've just brought up health protection again, so that's—

Mr. Jim Bimson: I mean health protection but not the animal inspection portion of it. Food inspection is a separate agency from Health Canada. Health protection is looking at things like medical devices, drugs and so on. They expect to have all their systems ready by June 1999.

Ms. Beth Phinney: Okay. Is that just the systems within the department? It has nothing to do with hospitals or systems across Canada.

Mr. Jim Bimson: That's strictly the systems within the department. We're not measuring the hospitals.

Ms. Beth Phinney: Who's doing that?

Mr. Jim Bimson: That would be a provincial area.

Ms. Beth Phinney: Is anybody checking to make sure the provincial governments are doing it? Is there any concern in Health Canada about whether this is being done?

Mr. Jim Bimson: Health Canada is in dialogue with the provincial departments of health.

Ms. Beth Phinney: Do they have any reports from the provincial people?

Mr. Jim Bimson: I'm not aware specifically of reports.

Ms. Beth Phinney: Okay. Thank you.

Ms. Linda Lizotte-MacPherson: Health Canada has set up a national clearing house of information and there is also a database for medical devices that's available to hospitals and all health care organizations.

Ms. Beth Phinney: My next question is on the auditor's report. You said you expect to bring a report to this committee in November. I may be wrong, but isn't that a little too late? We can't do anything with your report after we get it in November.

The Chairman: Mr. Desautels.

Mr. Denis Desautels: It may sound too late, but we also said, in carrying out that work, if we find problems we will bring them immediately to the attention of government officials. So hopefully by the time we report, all of those will have been taken care of. It will be our last report on this issue, but throughout the audit we will be in direct contact with government officials. If we have problems we will try to settle them immediately.

Ms. Beth Phinney: Are you just continuing on with that study? Do you have some staff who are starting that now for the next eight months?

Mr. Denis Desautels: We have people who are working continuously on Y2K issues. We have identified that as a priority issue for our office. We know the committee is expecting us to continue to show interest in that. We are doing two things in 1999. We are preparing that chapter to do that particular audit. But in addition to that, the Treasury Board Secretariat, as you know, is preparing these monthly updates on the state of readiness. June 30 has been identified as a key date. We plan to do an audit of the information as of June 30. We will report to this committee as soon as that work is done in September, to give you some assurances that the information, as of June 30, is accurate and complete.

Ms. Beth Phinney: Will that be based only on the six you've studied in here, or will it be across the board on all departments?

Mr. Denis Desautels: It will not only be on the six we reported on in 1998; it will be on the total report prepared as of June by the Treasury Board Secretariat.

Ms. Beth Phinney: All right. We'll look forward to seeing that in early fall.

The Chairman: That's correct, Ms. Phinney.

Mr. Myers.

Mr. Lynn Myers (Waterloo—Wellington, Lib.): Thank you very much, Mr. Chairman.

I wanted to talk a little about the $100 million contract you had with seven companies. I think perhaps you referenced that in earlier meetings. I wonder if you could give us a status update on that money, how it has been used, and whether or not you think you'll need additional money in that area.

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Ms. Linda Lizotte-MacPherson: Mr. Chairman, the take-up of the $100 million contract has in fact been excellent. There are currently contracts in the neighbourhood of $140 million that have been let, and in addition there are some that are in the process of being let. Over and above that there are other procurement and contracting vehicles in place for year 2000. The total in contracts is over $280 million, so there has been significant uptake.

Mr. Lynn Myers: Has that system worked well, in your view?

Ms. Linda Lizotte-MacPherson: Mr. Chairman, in my view it has worked extremely well. You may recall that under the arrangement the government had guaranteed seven firms $100 million, and in return they would guarantee availability of skilled resources, which are highly sought after. It has worked quite well. We have not faced any resource constraints at all, unlike the situation I faced five months ago prior to joining government. So it has been a very effective tool for us.

Mr. Lynn Myers: I want to turn to the contingency planning at the national level, and specifically with regard to Canada's critical infrastructure. I wonder if you could comment about that. Is that taking place, and how is that working?

Ms. Linda Lizotte-MacPherson: The Minister of National Defence has been asked to facilitate and coordinate national contingency planning through the NCPG group, and they are on schedule. They are currently in the process of completing a national risk assessment that focuses on the critical components of Canada's infrastructure. They'll then do a GAP assessment and come forward with a contingency plan.

Mr. Lynn Myers: Could you elaborate on that contingency plan? Is there a set protocol or sequence of events that kick in? How exactly does that work?

Mr. Richard B. Fadden (Assistant Secretary, Government Operations Sector, Treasury Board Secretariat): Mr. Chairman, what is going to happen is that once the NCPG has analysed the information it is collecting now and has issued a national assessment, a variety of scenarios will be developed, ranging from the world as we know it will come to an end to we believe that only minor hiccups will occur throughout the system. Officials will then decide which of these scenarios are the ones that have to be put into place.

Responsibilities will be assigned to various departments, perhaps the most important of which will be the Department of National Defence. They're already anticipating some assignment of responsibilities under the national assessment because, as Mrs. Lizotte-MacPherson mentioned in her opening remarks, Operation Abacus is under way right now. They've suspended just about all military training this year, except training in relation to aid to the civil power, which would be used to further the assessment work.

Basically, what I'm saying is that some time in late March or early April a national assessment will be issued. It will be based upon the government's best analysis at the time of what will likely happen. We will then develop a series of scenarios, and then assignments will be made against those scenarios to various government departments.

Mr. Lynn Myers: So it's your feeling, then, that things are in hand in that very important area.

Mr. Richard Fadden: I think they are, but I think it's also important to remember that the national contingency planning group is focusing on national critical infrastructure. The goal of this organization and indeed of all of our efforts here is not to solve the Y2K problem in every home in the country. We're talking about critical infrastructure. But to that extent, we believe that is the case.

Mr. Lynn Myers: Thank you.

I have had an opportunity in my riding to send letters to local municipalities, the hydro commission, and other boards and commissions. I was just trying to get an update as to where they're at in this area. I wondered if you had any advice for individual members of Parliament as to what we could and should do in terms of taking a look at what our constituents think about this.

Ms. Linda Lizotte-MacPherson: Mr. Chairman, I think members of Parliament and senators clearly can play an important role in terms of raising awareness and providing advice to Canadians through householders, town halls, and so forth. A lot of the information is available through the web site as well. But in addition, in December some MP kits were distributed that provide you with a lot of the necessary information to communicate to Canadians. We certainly encourage MPs and senators to communicate throughout 1999 on this issue.

• 1620

Mr. Lynn Myers: That's a very good point, Mr. Chairman, because I think there's a lot of unease about this. There is some fear-mongering in terms of what people think and how they think things might unfold. So I think anything we can do is really in our best interest.

Before I finish, I want to congratulate the Treasury Board people. We've sat at this table before, and I was quite worried for awhile, but I think things are starting to pull together in a way that is really meaningful for Canadians. I want to tell you that and to congratulate you for your good work.

The Chairman: The proof will be in the pudding, Mr. Myers—

Mr. Lynn Myers: Indeed, it will be.

The Chairman: —and the pudding will be cooked on January 1, 2000.

Mr. Lynn Myers: I'm much relieved, however, based on some of the things we've heard in previous months.

Mr. Steve Mahoney (Mississauga West, Lib.): So you're going to fly on the first.

Mr. Lynn Myers: Yes, with you.

The Chairman: Thank you, Mr. Myers.

Now we'll turn to Mr. Forseth. I think that's the end of the first round, so we're down to four-minute cycles, Mr. Forseth.

Mr. Paul Forseth (New Westminster—Coquitlam—Burnaby, Ref.): I'll try to be direct and brief.

First of all, I'll address the old reporting question. In the reports we'd certainly like to see—and Mr. Mayfield alluded to that—lists of actual hardware that was fixed, lists of actual contracts that were let, lists that specified what was actually being done, and lists of the tested systems that have been signed off on. We hear about all kinds of reports and meetings. I think more money has been spent on estimating what's being done and reporting and developing committees than on someone actually replacing a piece of hardware.

It's nice to have these ballpark guesses as to we're 50% compliant or 75% compliant, but it sure would be nice to hear exactly what pieces of hardware have been thrown out the door and replaced and where the programming has been done and put over to one or the other so that people can understand that, yes, the mainframe that operates OAS has been replaced or whatever, that kind of clear reporting. Where can we can get that kind of information?

Mr. Richard Fadden: Mr. Chairman, perhaps I could take a stab at answering the question. First of all, I reiterate my colleague's regret that the bulky report we alluded to earlier hadn't been distributed to members of the committee.

But I think at the level of detail you're talking about, we have to refer you to the departments and agencies concerned. The secretariat really does not have the capacity to monitor departments at that level of detail, to be honest with you.

Mr. Paul Forseth: I'll just cut you off there, because that's what I needed. Basically, what you're going on is a matter of trust. I know how these bureaucracies work, how the reports go on the roll-ups. When you do your audits, have you actually gone down into the basement and looked at anything and seen some technician actually doing something, as a spot audit to make sure those reports are in fact valid?

Mr. Richard Fadden: Yes, in fact we have, Mr. Chairman. We've done two kinds of things in a general sort of way. A number of our colleagues in the secretariat regularly visit departments, and they have technical discussions. As well, the secretary of the board has strongly encouraged deputy heads to retain either their internal audit functions or auditors from the private sector. I think the vast majority of the departments and agencies are doing that. So in truth we share your concern that we have to make sure the information being reported is accurate, and we believe it is.

Mr. Paul Forseth: I wanted to ask about the Auditor General's office itself. Has there been any internal look at your own operations? What about yourselves? Are you Y2K compliant in all of the things you do within your office, besides looking at the operations of others?

Mr. Denis Desautels: If you're asking me about our own organization, Mr. Chairman, yes, we in fact track our own compliance with Y2K on a regular basis. As we speak today, we believe we're fully compliant.

But even at that, we're not resting on our laurels. We're making sure that the situation doesn't change. As things evolve, we sometimes discover that for systems we were assured were compliant, such as the telephone system, all of a sudden we're told it's not as compliant as we thought. So continuous monitoring is required by each organization to make sure they are in fact compliant.

Mr. Chairman, I think one of the things I might add here is that Mr. Forseth is concerned about mini-systems within departments that are quite important but that in fact are not being tracked right now. As we said in our opening statement, the Treasury Board secretariat is tracking the government-wide mission-critical systems—the 48 that have been identified as such. But, you know, there are many, many other systems and departments that are not being tracked centrally, and it's up to the departments to actually do that. Right now, of course, the only way you can have information on that, I guess, is by asking the departments directly how they're doing.

• 1625

Mr. Paul Forseth: I would just like to end with one philosophical question about these percentage confidence levels. Is the last 20% the hardest?

Ms. Linda Lizotte-MacPherson: Mr. Chairman, we expect that the last 10% will probably be the most difficult because of the interfaces and interdependencies Mr. McKenzie spoke about. I also think it's important to understand that we believe there is integrity in those numbers, for two reasons. One, we are following the Gartner Group methodology, which is an international standard. Second, 17 of the 23 departments have already undertaken an audit or several audits on their own, either with internal audit capabilities or third parties, and the remaining also plan to undertake audits.

The Chairman: Thank you, Mr. Forseth.

Now we'll go to Mr. Jones. Mr. Jones, I have to apologize; I should have included you in the first round. Therefore, you have eight minutes.

Mr. Jim Jones (Markham, PC): Thanks, Mr. Chairman.

My questions are to the Auditor General. Your review of the June 30, 1998, results summarized by the Treasury Board Secretariat showed good progress in only four departments, accounting for seven out of 48 government-wide mission-critical functions. Furthermore, nine departments and agencies responsible for 18 mission-critical functions had a score of 50% or less for completing their work needed to make the system supporting the functions compliant. As a result, you noted last June that some essential government services may be interrupted at the start of the year 2000.

Has this situation improved? If it has, can you give us a breakdown by department and mission-critical functions that are scheduled to be compliant by the year 2000?

The Chairman: Ms. Cheng.

Ms. Nancy Cheng (Principal, Audit Operations Branch, Office of the Auditor General of Canada): Thank you, Mr. Chairman.

As the member has clearly pointed out, our audit was done as of June and those were the observations. Now, in the opening statement by the Auditor General we have clearly stated that the situation is very dynamic. The government itself has indicated that the progress rate is now 82% as of December. In fact, based on the January information they are now at 84%. Obviously all of those numbers change, and we currently don't have a chart that indicates which ones are necessarily behind. That is one of the reasons we're saying perhaps the committee would like to make use of the current progress report and try to see how we can make it more meaningful and have a better understanding as to what those numbers are.

In the slides the CIO has provided, it does indicate percentages for the 23 departments, and you can clearly see which are the ones that are farther behind, but are they really behind to the point that it is of serious concern? I think those are some of the questions that perhaps committee members could raise.

Mr. Jim Jones: Of the 48 applications, do you have this someplace on a chart, so we would know that maybe three are 100% compliant and done, and 15 are at 90%, and which ones are really in serious difficulty? Is there someplace where we have what these 48 mission-critical applications are and where they are in the completion cycle?

The Chairman: Are you addressing the question to the Auditor General's office, or to...

Mr. Jim Jones: The Auditor General.

The Chairman: Okay. Ms. Cheng.

Ms. Nancy Cheng: That really is the purpose of the progress report, that at this particular point the progress report highlights progress at a department level. It doesn't get down to the mission-critical function level, which perhaps would be more meaningful for you to understand which functions are ahead and which functions are perhaps behind.

I would venture a guess, though, that Treasury Board Secretariat would have that information, because they'll need that before they can roll it up to an overall department. Maybe you would like to address that question to the Treasury Board Secretariat officials.

Mr. Jim Jones: I'd like to address it to Linda Lizotte-MacPherson.

Ms. Linda Lizotte-MacPherson: Thank you, Mr. Chairman. As of the end of January, 20 of the 24 departments were at 80% completion.

The Chairman: Mr. Jones' question was on the individual systems, all 48 systems, not department by department. Do you have it on a system-by-system basis, versus department by department?

• 1630

Ms. Linda Lizotte-MacPherson: Departments do report in on a system-by-system basis, and then we aggregate it at the departmental level.

Mr. Jim Jones: Where is it in the schedule that I could say, first of all, what are the 48 mission-critical applications and where are they in the completion cycle? Where is it?

Mr. Jim Bimson: Yes, there is a published list, and actually it's on the web as well, of the 48 mission-critical functions, and they're divided up over—

Mr. Jim Jones: Functions or applications?

Mr. Jim Bimson: They're functions. Some of them are one application, some of them are several. It depends on... And we do in fact have the information by the function. When you get down to the level of the application, there are something like 1,500 applications overall supporting the 48. So we don't really collect at that level of detail, but we do know at the level of the function.

Mr. Jim Jones: Human Resources Development Canada originally planned to have the Canada Pension Plan system fully compliant by December 1998. Your report stated that HRDC subsequently was unsure whether it would meet this deadline and as a result several Canada Pension Plan subsystems may not be fully compliant before the year 2000. HRDC has since promised to have a contingency plan to ensure that the CPP benefit payments will continue in the year 2000.

The Treasury Board requested a risk assessment for HRDC by last August. When did HRDC provide a risk assessment? Did HRDC meet its deadline to have CPP fully compliant by the end of 1998? What is the status of detailed contingency plans for HRDC? And do you have confidence that HRDC will meet its year 2000 goal of uninterrupted CPP benefit payments?

The Chairman: Miss Lizotte-MacPherson.

Ms. Linda Lizotte-MacPherson: Mr. Chairman, in response to Mr. Jones' question, yes, Canada Pension Plan did meet the December timeline. It is now year 2000 ready. In addition, HRDC has completed a risk assessment as well as contingency plans for all of their government-wide mission-critical functions. So they are meeting their deadlines. In addition, old age security and employment insurance systems are also ready.

The Chairman: I think it's interesting to raise that the Auditor General said that his office was fully compliant, and then surprise, surprise—they found out the telephone system had to be updated after he thought it was Y2K compliant right through the office. Are we going to see the same types of surprises in other departments?

Ms. Linda Lizotte-MacPherson: Mr. Chairman, it is likely that there will be some minor glitches or issues that emerge when the systems are fully deployed; that's natural with any system. But at this point the systems are fully certified and have been deemed to be ready.

The Chairman: Mr. Jones.

Mr. Jim Jones: In the Auditor General's report it was found that Indian and Northern Affairs Canada had not addressed the year 2000 problem on a department-wide business-oriented basis. Your report also found that the year 2000 workplans for the three mission-critical systems do not include details of the activities to be performed. It will therefore be difficult for the department to monitor progress and assess any additional needs. Test plans for the systems have not been prepared.

Treasury Board requested a risk assessment from Indian Affairs by last August. When did Indian Affairs provide a risk assessment, and when are the target dates for Indian Affairs submitting an information technology contingency plan and a business contingency plan? This is to the Treasury Board.

Mr. Guy McKenzie: As you may appreciate, every department in fact was asked to produce risk assessment for the summer period that you just referred to, as well as a contingency plan for the closing of the calendar year. We have received the risk assessment for all the departments. For the contingency plan we have received the majority of them at this point, and as we speak Indian Affairs is at a state of readiness that shows on the web site at 95%.

What you may want to consider is that since the evaluation of the Auditor General in June, where overall we were at 50%, we moved up to 84% overall, and therefore some departments like Indian Affairs are now standing at 95%, which between you and me is basically addressing the issue that was referred to before by Mr. Williams and others. That means they are completing their system right now. They're subject to going through real-life testing, which includes interfaces and interdependencies as well. And every department, no matter what, is asked to produce a contingency plan.

• 1635

The Chairman: One final question, Mr. Jones.

Mr. Jim Jones: I'm not sure whether this one has been asked, because I think I heard something about the Canadian Police Information Centre, which is a system that supports policing services throughout Canada. It is maintained by the RCMP and used by 700 detachments and more than 500 other agencies.

To the Auditor General, your report concluded in no uncertain terms that the CPIC system continues to be at risk. I quote from section 20.77:

In particular, if end-to-end testing and co-ordination with the user community are not addressed adequately, the use of the CPIC system could be greatly curtailed.

Treasury Board requested a risk assessment from the RCMP by last August. When did the RCMP provide a risk assessment? Has the year 2000 checklist been prepared and been distributed to every RCMP detachment in the country, as promised in section 20.78? My last question in there is what effort has been made by the RCMP to educate local police forces and municipalities?

Mr. Jim Bimson: If I can address the issue of the CPIC, in fact the CPIC is largely now in operation in the year 2000 environment, about 90%. They have some minor renovations to be done. They expect them to be done by April. They do have plans to do the testing with the various other forces that share CPIC. They did in fact deliver a risk assessment plan. We do now have their contingency plans as well. So they're moving right along.

I can't specifically address the checklist in the detachment because I haven't been involved with that part of it.

The Chairman: Thank you very much, Mr. Jones. Now we'll turn to Mr. Mahoney.

Mr. Steve Mahoney: Thank you, Mr. Chairman.

I was interested in Mr. Forseth's question about whether the last 20% is the toughest. I suspect the last 24 hours is going to be the toughest on this one as we all hold our breath.

I also think one of the problems, some of the frustration you might hear about, as I have, is that we get calls from constituents who say they aren't getting or seeing the information. It's being posted on the web page, which I wasn't aware of until today. Perhaps we'll monitor that now more carefully and I'll be able to tell my constituents to do so as well. Maybe before the day's out you can give us your address.

I'm a little confused though when I read the two opening remarks. In the Auditor General's remarks—and this is dated the same as the TBS report—on page 2 he says that:

...nine departments and agencies responsible for 18 of 48 mission-critical functions had completed 50 percent or less of the work needed to make the systems compliant. The Secretariat considered a progress rate of 60 percent or more at that time to be “good”; only four departments responsible for 7 mission-critical functions met that criterion.

A voice: That's old.

Mr. Steve Mahoney: It looks old, but it's dated the same day. It's dated today. So what am I reading here?

The Auditor General's concerns were that it be completed by June 1998. You're making reference to it today, and yet I'm hearing everything has been updated. Were you not aware, perhaps, Mr. Desautels, of the update when you put together this report to the committee?

Mr. Denis Desautels: Mr. Chairman, we reported to this committee or to Parliament on this a few months ago. As we said, the information was from when we did the audit as of June 30 using information at that time that was produced by the Treasury Board Secretariat. The idea there was to find a point in time and verify that the information that was being put out to members of Parliament was in fact the correct information, and that in addition to this the departments we selected in our example were likely to make it, were likely to be fully compliant by the year 2000.

As I said in my opening statement, this is clearly information as of June 1998. We have been in contact with the departments and with the Treasury Board Secretariat since then, and we fully realize that the situation has been changing. In fact we do say that in this opening statement later on.

• 1640

Mr. Steve Mahoney: You're just reiterating the concerns that had been expressed previously.

Mr. Denis Desautels: That is correct, Mr. Chairman, and by doing that you can more easily, I believe, track the change that has been taking place since June and up to the end of December, which in fact I think is useful information for the committee in order to gauge how we're improving.

Mr. Steve Mahoney: On the issue Mr. Myers raised about the communications, is anybody putting together a full communications plan and strategy to communicate with all Canadians, notwithstanding the fact that your main focus here is on the departments, the government departments and systems? Is there, to your knowledge, any communication strategy in the works to get the information out? Also, I know you've put a flyer out to a number of homes—11 million homes, I think you said—in Canada, and I frankly haven't seen that flyer yet. Maybe you could expand on that.

Ms. Linda Lizotte-MacPherson: Okay. Yes, there is a comprehensive communications plan that has been developed. Perhaps it may be useful to table the flyer, because it does contain web sites as well as a 1-800 number, and in addition table the hard copy of the January report for the committee.

I will ask Mr. McKenzie to speak to the communication strategy and action plan.

Mr. Guy McKenzie: You raise an important issue, and I think it's important to get the information out.

As a point of interest for the committee, let me mention that the web site that Industry Canada has on their Y2K strategies has received so far 350,000 hits, so that means a lot of people are showing an interest. On the 1-800 line, we have had 14,000 phone calls so far, which were received and answered by Industry Canada and some others. We are in the process right now of launching the third survey of Statistics Canada.

Many advertising campaigns have been launched from different departments, and so far, not including the 11 million householders here, we have more than 20 million brochures of different kinds that were sent by Industry Canada, Revenue Canada, and many others. The web site was the object of a press release. You may have missed it, as you said you learned today that it was available now publicly.

Realizing that, in a recent meeting with the provinces—since we talked about federal-provincial cooperation before—we realized that a lot of information was out. Recently one of the members of the committee was asking us about pacemakers and defibrillators. Health Canada had put out a very comprehensive press release, including in great detail all the information, and overall stating that there is no problem. Realizing that, we are now preparing a communication strategy with the federal department, as well as with the provinces, in order to do it collegially and share the information we have. That's the goal.

The Chairman: Ms. Phinney.

Ms. Beth Phinney: I just have a short question. The members who are around the table here work very hard preparing for the committee meetings and hoping that we're understanding the reports ahead of time and preparing questions ahead of time. I'm just wondering why the Treasury Board can't give us their information at least 24 hours before the meeting, maybe 48 hours before the meeting. Surely this isn't information you got this morning and typed up at noontime and then gave to us for the committee today. Why can't we have this information ahead of time?

Ms. Linda Lizotte-MacPherson: Mr. Chair, the speaking notes and the presentation were provided in advance.

Ms. Beth Phinney: How far in advance was it received? How far in advance was it sent out by you people?

The Chairman: The clerk, Ms. Phinney, advises that we received the speaking notes just prior to the meeting commencing, and they were distributed just immediately prior to it.

Ms. Beth Phinney: But when did you send them out? I mean, is there any way you could get them to our clerk in time so we can see them at least 24 hours ahead of time?

The Chairman: I think the point is well made that if we are going to be substantive in our questions and our understanding of the issues, we do need to have these opening statements reasonably well in advance. And since most of this information appears to have been drawn from your web site, which has been up for some weeks now, we could have had this information.

Again, Parliament needs to be kept informed, and Parliament expects to be kept informed. That's the message we're hearing from all around the table today, and I think that has to be taken quite seriously.

• 1645

Mr. Guy McKenzie: If I may, Mr. Chairman, I would like to make a suggestion. I realize a lot of the information never hit the members of the committee here, and you should receive it. So what I will do with my team on a monthly basis is when we put out the information on the web, we will make sure you have a hard copy as well. Therefore members will always be apprised with the paper form of the information, as well as other types of information that we have on a regular basis.

The Chairman: I think an executive summary would be fine, including the address so we can get the rest of the information if we so desire. That would be preferable.

Turning to the Food Inspection Agency, I notice in paragraph 20.23 of the Auditor General's report that he said, and I understand also this was at June 30 last year:

As a result, there is no critical path for the Agency's overall Year 2000 project. Further, as of June 1998, it had yet to begin reviewing its interdependencies with other countries.

Then, when we take a look at your report we see they are now 81% ready, having gone from not even a standing start but where the importance was drawn to them by the Auditor General. How assured can we be that they are 81% ready?

Mr. Guy McKenzie: First, we also realize the importance of the Food Inspection Agency. We work with them. The Auditor General in his report was suggesting to us some strategic intervention, to use the same expression, which means basically that we met with the officials of the Food Inspection Agency very early in the process. They improved so much, as you just stated yourself, in their percentage that they even became a centre of expertise for embedded systems in laboratories. Right now they provide advice to other departments that have laboratories, such as Health, Environment, or RCMP. In terms of the specific process, they have been audited.

Jim, do you want to add anything?

The Chairman: It's just that the reports we have been getting here are that everything is fine, don't worry, be happy. But then when we get to detailed reports of the Auditor General, we find out when you look below and underneath that he has many, many concerns. For example, I look at paragraph 20.26, where he talks about again the Canadian Food Inspection Agency with embedded chips. They were asking suppliers to give them information on embedded chips, and as of last June they were still waiting for two-thirds of them to respond. You're telling me they're now 81% ready, including embedded chips?

Mr. Guy McKenzie: Let's address the issues as you presented them.

We don't say we should relax and be taking everything for granted. Quite the contrary: we must keep the pressure on and we can never relax until we hit January 1, 2000. Even then we're still going to be very keen on everything.

In terms of the embedded system, they were really aggressive, with a good methodology. They built up that centre of expertise. I visited them again last week, and I can tell you that as we speak they are receiving letters confirming that their building has been checked, the inventory is done on embedded systems, and some of them have been declared Y2K compliant, such as the Experimental Farm here in Ottawa, which I visited. So the process is going according to schedule.

The Chairman: But in paragraph 20.36 the Auditor General points out, and this is with regard to the Department of National Defence, that 80% of the systems have thousands of these embedded chips and systems, and last June they were still doing an inventory, still trying to find out where they were and if they had any. Now you're telling us they're 82% ready? You know, I find the remarkable recovery a remarkable recovery.

After the Auditor General was in and after he pointed out in paragraph 20.37 that perhaps they were not as ready as DND should be, they decide that perhaps they should think about a contingency plan—after the Auditor General pointed out their problems. I'm concerned about the departmental management of this issue. Remember, the public accounts committee told the Treasury Board a year ago to take a hands-on approach, and you're still just at the monitoring stage. I'm a little distressed.

Ms. Linda Lizotte-MacPherson: Mr. Williams, in response to your comments, first of all in terms of embedded systems, you may recall at our last appearance we had flagged embedded systems as a potentially high-risk area for us, and part of it was that it was an unknown area. The feeling was that 5% to 10% of embedded systems would be date-sensitive, and we were concerned about being able to locate the embedded systems.

• 1650

However, we are pleasantly surprised that the embedded system challenge has not been as big a challenge as we thought in terms of locating them. In fact, only 1% to 3% are date-sensitive and require some work. So that would clearly explain why there has been some rapid progress in departments that have a high number of embedded systems. That's consistent with what private sector industries with a high prevalence of embedded systems, such as electricity and telecommunications, are also finding.

The Chairman: Again, I get back to my perception that you're trying to tell us don't worry, be happy, and yet when I look at the information, for instance, for Indian and Northern Affairs, which you now say is 95% ready, as of last June the Auditor General said they hadn't even addressed it on a department-wide basis: “Only at the end of June 1998 did the department formally appoint a senior sponsor to direct its Y2K project and take on a department-wide perspective”. Here we are eight months later, and it's now 95% complete. This is, as I said, a remarkable achievement for someone who didn't even address the issue seriously last June. What has taken place?

Mr. Linda Lizotte-MacPherson: Mr. Williams, I think it's a combination of things, including implementation of the recommendations from this committee as well as from the Auditor General. But we did put in place stepped-up action plans, and in areas where we felt there was some potential risk we did undertake strategic interventions and worked with those departments to put in place more aggressive timelines and to bring forward additional resources. We helped establish centres of expertise in order to accelerate the embedded systems issue. So I think it's really a combination of things.

By no means are we saying everything is fine. There is still a lot of work that needs to be done, and we're taking the issue very seriously.

The Chairman: I see that down at the bottom of the heap is Health Canada, at 69% preparedness as of January 1999. By your own admission that does not include the direct patient contact at hospitals, and that surely has to be the most critical issue. I'm surprised that as a federal government that has a very large role in funding health care in this country, you wouldn't even have an assessment of their capacity to deliver health care on January 1, 2000.

Mr. Guy McKenzie: It's also a question of jurisdiction, to be totally honest. As Mr. Bimson alluded to before, when we are in the world of medical devices, Health Canada has a certain role as a regulator. That's about it. The web site they have opened with the provinces as a pilot project where they have an inventory and they are writing to the vendors and so forth can go a long way in dealing with medical devices.

In terms of providing service to patients and medical care per se, that falls under the jurisdiction of the provinces. As Linda, Dick, and myself were touring the provinces, obviously we paid attention to that in discussions with the provinces, but it is up to the provincial governments to make sure that the hospitals are Y2K compliant in terms of medical service to a patient.

The Chairman: Are we considering additional funding for health care? We're talking right now about $2 billion for the federal government, and that's just within a very narrow concept. The federal government funds health care to a large degree. I don't think that on January 1, 2000, patients are going to care about jurisdictional disputes. They're going to be concerned about their health care and whether or not it can be delivered. Are we going to put additional funding into health care in order to allow them to handle these conversions and ensure they're ready?

Mr. Richard Fadden: Mr. Chairman, the basic underlying premise of the Government of Canada's Y2K approach to life is that if it's an individual responsibility, the individual pays; if it's a federal responsibility, the federal government pays. This applies to the responsibility of the provinces. The federal government makes massive transfers to the provinces in the health field, as in any number of others. We have—

The Chairman: There have been massive cuts, too.

Mr. Richard Fadden: That's true, but that's a policy matter I don't think I'll venture into.

Massive amounts of money are being transferred. We have had discussions with all of the provinces and territories, and I think it's probably fair to say—and your researcher could probably discover the same information on the various web sites that are available—that their rate of preparedness is not the same across the country. All of the provinces have identified funds internally to reallocate to their health systems. As far as we're concerned, there's no national problem in this area yet.

• 1655

The Chairman: Well, as I said, I'm not sure the patient is going to concern himself about jurisdictional responsibilities. If his life support fails at an inappropriate time, someone is going to have to answer for it. I think the federal government should be ensuring that adequate funds are available for health care, because that's a high priority for Canadians.

Looking at the RCMP, in paragraph 20.69 the Auditor General talks about circumstances under which the RCMP are currently operating, and says that “delays could go undetected for months.” You talked about everybody being ready by June 30, 1999. That's only four months away. Yet in the critical plan that the RCMP has available, the delays could slip for many months and go undetected. I think you now have the RCMP at 91% complete. Have these delays all been identified now?

Mr. Jim Bimson: Yes, Mr. Chairman, they have, and the RCMP expect to be ready by March.

The Chairman: I get back to the questions we've had elsewhere. You keep telling us the departments are 90% or 80% ready and so on, but there are 48 mission-critical systems that you have identified. I wouldn't have thought it would have been very difficult for you to give us a list of the 48 and how each one of these 48 is being fixed. I think that's the information the committee would like—not department by department, but the 48 systems that you have developed that are mission critical.

The other concern I have—and it's a very real concern—is that while you have focused on these mission-critical systems and are telling us that you're going to be almost ready, if not completely ready, the peripherals, such as the phones in the Auditor General's office, will not be. If they don't work, you're operating in a vacuum and there is no service to Canadians. You, as the Treasury Board, are not even monitoring these things. What are Canadians going to do?

Mr. Steve Mahoney: If they can't get the Auditor General?

The Chairman: No, if we can't get the service. The Auditor General has fixed his telephones.

Mr. Steve Mahoney: Only the opposition is worried about that.

The Chairman: His phone now works.

Mr. McKenzie.

Mr. Guy McKenzie: I'm just concerned that the monitoring, with the rigorous methodology that we have, was focusing on government-wide mission-critical systems. That did not mean that departments only fixed government-wide mission-critical systems. Right now, they are also fixing the departmental mission-critical systems that are supporting the first category, and we will begin a quarterly reporting on that with them. And Mr. Bimson can also elaborate on the series of visits he will make to every department in the next couple of weeks.

The Chairman: Briefly.

Mr. Jim Bimson: We started a program of collecting information on the department mission-critical system on a quarterly basis, and we'll shortly have some stats on that program. I am visiting each of the large departments over the next month. We want to identify with them those systems, department-wide, that are most critical to their operation, and we will begin looking at those on a monthly basis as well. We will step up our focus on those as the government-wide mission-critical systems move into the 100% column.

The Chairman: But that's the message the public accounts committee gave to you more than a year ago: to step it up and get after it right away. I'm very skeptical that you will meet it. I have great confidence in our Auditor General, but even he has to admit that while he thought he was Y2K compliant, he found out he wasn't.

Mr. Mayfield, we will turn it over to you now.

Mr. Philip Mayfield: In listening to you, Mr. Chairman, I am reminded of a certain hospital administrator. I don't know if he was being facetious at the time or not when he said he figured the hospital business would be a really good business if it didn't have all these patients involved.

As we discuss this, we know that there are going to be a certain number of problems at the end of the line. We know there are things that can be fixed beforehand. I want to come back not to this report, but perhaps to going just a step beyond it.

• 1700

In this network of sorting out what can be done, how problems can be identified—maybe not for the Department of Health, they're probably beyond help anyway, but local administrators, district administrators who perhaps are still in a state of denial—how can you provide me with information I can use in my writing, in my speaking, in my publications so I can perhaps at least catch their imagination or interest, to help me explain to them what is happening, what they can do before January 1 next year?

I'm wondering also if there could not be a creative step by having a liaison person in your department who would be available to MPs who are concerned about this.

The other side of it is that after January 1, if somebody doesn't get their cheque... The difficulty of giving good service to your constituents is they know how to use it. I'm concerned there are going to be a lot of people coming to see me and asking what this government is up to now, because we're on the front line there.

I would like to know what you can do to back me up before we ever get there. And I'm wondering if there is not some kind of creative possibility for your department to work with MPs in sorting out what's happening within the government, how you can support the MPs in meeting their constituents and their interfacing with the government, both before January 1 and afterwards. Is this not something that could be worked out? We have a web site now, but it's not really realistic for me to check into a web site to see what's there.

Ms. Linda Lizotte-MacPherson: Mr. Chairman, we can provide the monthly executive summary and continue to provide members of Parliament with information kits as we did in December. In terms of setting up a resource available to you, we can certainly explore the possibility of doing that.

Mr. Philip Mayfield: I'd appreciate having a phone number that I could refer to as I'm talking to someone or facing a particular problem, to have someone knowledgeable to discuss it with, someone who perhaps has resources to give me some assistance with that.

I want to go back to where I concluded last time, and then I'll finish, Mr. Chairman.

We were talking about contingency plans, and I want to go on and ask... You mentioned that if you believe the contingency plans within departments were not adequate, you would get involved with the department. I presume this is what you call strategic intervention. Is that correct? How would you define strategic intervention? This has been a matter of concern for me from our first discussion on this. How would you define strategic intervention?

Ms. Linda Lizotte-MacPherson: From our point of view, there are two types of strategic interventions. One is if we see that there is a common issue reoccurring across the federal government and we need to put in place a common solution such as loan funds, procurement vehicles, workshops on embedded systems, and so forth. That would be one type. Another type perhaps would be if we believe that some additional attention or stepped-up action plan is needed, or if there's a risk area or an area of concern, we would work with the department to address the area.

Our experience has been that everybody is taking the issue very seriously. It's a top priority, so they've been extremely receptive to any suggestions we provide. In fact Mr. McKenzie and Mr. Bimson typically handle these interventions and Guy meets regularly with senior officials. Guy may have something to add.

Mr. Guy McKenzie: I can add just four typical examples that were horizontal by nature because we found them in different departments. And as colleagues of Treasury Board Secretariat we supported the departments with things such as the free loan fund and the procurement contract that was addressed by the committee a few minutes ago.

We also went out to retain a number of IT professionals that we needed, and there is what we've done for embedded systems, both in terms of the six offices throughout the country for buildings and facilities, and the survey that is now being completed by Public Works and Government Services Canada.

• 1705

So far, just as a point of interest, data are not yet totally collected, but none of the elevators happened to be non-Y2K compliant. That's a piece of information that is now being collected by strategic intervention done through Public Works and Government Services Canada: risk management, contingency planning, as well as some specific intervention when needed in a particular department that needs a particular solution for something specific. That is an illustration of what could be general and what could be specific.

Mr. Philip Mayfield: Specifically, I look at number 24, which shows Health Canada at 69%—and this has already been referred to. Is that not an instance in which some strategic intervention might be needed? And what will you do? A lot of time has passed, and there's a long way to go for this department. This is an area of critical concern for many Canadians. This is going to be an extreme embarrassment if it's not up to date in time.

Mr. Guy McKenzie: We had several meetings with Health Canada, and they certainly have a full work schedule in front of them. The 69% that you referred to is for the internal systems, on which Mr. Bimson can elaborate. Between us here, it is not a big system among others. It's not like HRDC or any other bigger system that we referred to in the discussion.

On the other aspect of it—medical devices and so forth—the web site is out. Right now, there is an exchange of letters between the vendors and the department, and the rate of response is very interesting. For further details, though, I would refer you to Health Canada. They will have to come here to explain themselves to you, because we are far from assessing the details. I wouldn't want to lead you to wrong information.

The Chairman: Thank you.

Mr. Philip Mayfield: I have one other question, Mr. Chairman.

The Chairman: Very short, then.

Mr. Philip Mayfield: Yes, it is a very short one, but I think it's an important one.

If a department is unable to get it done, do you have the executive authority to act?

The Chairman: A short response, please.

Ms. Linda Lizotte-MacPherson: Mr. Chairman, if the department is unable to act, we would look at a triage situation or at loaning resources from one department to another.

The Chairman: I think the question was whether or not you have the authority to dictate and to act.

Mr. Richard Fadden: Mr. Chairman, the general approach we're taking in this country on this issue is the same one that we take on every other. We have a cabinet system of government and we work collegially. Having said that, Treasury Board has been established as the cabinet committee responsible for Y2K. If you look at the Financial Administration Act, it says very clearly that Treasury Board has the authority to issue administrative directions to departments. In our view, that is the last thing we want to do.

This is going to work if we get people to collaborate and cooperate, but we should be clear that the law does provide Treasury Board ministers with the authority to act as a very last resort. As my colleagues have said, however, no department to date has shown any ill will. What they have shown is the same kind of difficulty and challenge that organizations in the private sector and across the world have shown: the challenge of managing a whole raft of other priorities that are as important as this one. But in every single case, we've tried to eliminate roadblocks, we've made money available, and people have responded. In truth, those responses probably have not been as fast as we all would have wanted in every single instance, but we believe the figures we've set out do reflect a considerable amount of progress.

The Chairman: I'm going to turn to Ms. Phinney for a very short comment, and then we'll go to Mr. Finlay.

Ms. Beth Phinney: Yes, I have two short comments.

Since the Auditor General's reports are studied by so many people, both inside and outside of Parliament, I would like to see that the figures used in the report are a little bit more up to date when the report finally comes out. If we're looking at figures that are eight months behind, it's a little difficult for us to make a judgment, and the public is judging us based on what's in the report.

My other comment is to Mr. Mayfield. In my last four householders I have sent out a great deal of information about the year 2000 problem and what's going to happen on December 31. You can ask Eugène Bellemare. He has a householder that is 100% on that topic.

Mr. Philip Mayfield: I've been doing that for a long time.

Ms. Beth Phinney: And John Manley's department has many pages of material ready for you to put in your householders.

The Chairman: Mr. Finlay.

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

As one of the latecomers to this committee, I wasn't in on some of the early work. I must say, however, that I've enjoyed this afternoon's session. I want to thank the members of Treasury Board for something I find to be very important.

• 1710

I did have a letter from a constituent, an older lady who has been reading some material—I don't now, maybe it was Beth's householders or Mr. Mayfield's—and she was quite sure that Armageddon was about to arrive 325 days from today. My assistant wrote her a nice letter and sent her some information.

When I read her letter, I really I thought I had to say something to make her a little more lighthearted than she seemed to be about the thing. From her letter, I got the impression that maybe the grocery stores weren't going to have any food, that she wasn't going to be able to eat and so on. And I'm sorry, but I put a little PS at the bottom to say that I really thought the farmers were going to plant corn and potatoes and beans next spring, like they've done in the past; that her neighbours were not all going to disappear; and that there would be help from all kinds of people for some of these essential things. Mr. Chairman, I hope I was right. I think I am right, and I thank the members of Treasury Board for their information today.

I have one question for the Auditor General. It was asked by a colleague, but I'm not quite sure it had quite the same slant as I have on it.

In your observations on the audit of June 1998, sir, you said you were very concerned that some essential government services may be interrupted at the start of 2000. My previous comments don't belittle what you said, because I was trying to get to life and liberty, not some of the technicalities. Several months have passed since the completion of your audit. Based partly on the progress that has now been reported and partly on what we've heard today, do you remain concerned? If so, are there any steps the government should take that it is not taking now?

Mr. Denis Desautels: Mr. Chairman, I did say in my opening statement that with the information that has been disclosed in the recent past I'm optimistic that we will make it. But I also say that we should not let down. I think 1999 is a crucial year, but with the progress that's being shown, we should be optimistic that we can ensure there are no major interruptions.

At this point, too, I would say that we now have to turn our attention to the departmental systems to a certain extent, as we've just discussed in the last little while. I think there are many hundreds of such systems in departments, in agencies, in crown corporations. We have to turn our attention to those as quickly as possible, so there's still a lot to do in 1999.

The Chairman: Thank you, Mr. Desautels.

Mr. Perron.

[Translation]

Mr. Gilles Perron: I want to make a comment, Mr. Chairman. We all know that June 1999 is the date that has been set, or rather the date that was set, to start up the support systems for central services. I seriously doubt that by June 1999 we will be able to do this.

What can be done? How would you answer my concern? How much time do we still have? Will we be able to prepare ourselves in those last six months, between June 1999 and December 31, 1999? I think that was Mr. Desautel's concern and if my memory serves me well, he said so in recommendation 20.94. That is my concern.

Mr. Guy McKenzie: First, it's important to point out that June 1999 was not an absolute date for all systems. There are important systems that already meet the year 2000 requirements. We mentioned employment insurance and earlier on, Old Age Security. We also mentioned pensions and tax courts systems and others that are already prepared for the year 2000. Therefore by the time June 1999 arrives, several other systems will also be ready for the year 2000.

In the Auditor General's report of June last year, the state of readiness was 50%; it is now 84%. So you can see how far we have come in so few months, how fast we can move.

It should be pointed out that 11,000 people in the public service are working on this, that is 8,000 public servants and 3,000 employees working for the private companies that were mentioned earlier on, that is the famous 100-million-dollar contract. Thus there are several people working on this.

• 1715

Even with this information, we did not take anything for granted. On June 30, 1999, whether you are ready or not, even if your system is said to be Year 2000 compliant, you must prepare an emergency plan. You never know what can happen with a computer system, whether in the year 2000 or not. So there will be contingency plans. In addition, we will still have a six-month period from June 1999 to the end of December, to correct that which still needs to be corrected.

So I hope to have shown that there are interconnected safety systems to minimize the problems. But we can never guarantee zero problems. There will probably be some, but we are doing everything we can to prepare the systems. We nonetheless have contingency plans whereby we can take care of any remaining problems between June 1 and the year 2000.

[English]

Do you want to add anything, Jim? You're closer to that.

Mr. Jim Bimson: I think you've covered it very well. I think one thing to remember, though, is that not every problem will happen on January 1, 2000. Some will happen before that, and some of those that have already happened have been fixed. Others will continue to happen right through the following year. In fact, some of those systems probably won't be around for a half a year into 2000. We'll have to be vigilant for that whole period in terms of detecting issues and fixing them. It's a reasonably long-term problem.

The Chairman: Thank you, Mr. Perron.

In talking about problems before and after, there is one issue many people aren't aware of. I don't know how much of an impact it will have, but we have a leap year every four years, except every hundred years. The year 2000 is not a leap year, as one would expect. Is that a problem?

Ms. Linda Lizotte-MacPherson: Mr. Chairman, you are quite correct. There are a number of watch dates, and that is clearly one of them. Clearly, because of the leap year, it is a date we are monitoring. It could potentially be a problem, so that's one of the things that is factored into the planning as well.

The Chairman: I wonder how many people in the big wide world are aware of that. I think of building security systems that will get out of whack in terms of what the weekend is, when people may find themselves locked out of buildings on either a Monday or a Friday.

Mr. Guy McKenzie: If I may say something on the other intervention, at the strategic level, there were 12 dates that we made mandatory for departments, and 37 were optional depending on the systems we're referring to. The leap year, as well as 9/9/99 and some others, was part of the listing as well.

The Chairman: Before we wrap up, there are a couple of things. On the graphs that were provided to us by Treasury Board, I would like a motion that they become part of the formal record of the meeting, as if they had been read in.

Ms. Beth Phinney: I so move.

(Motion agreed to)

The Chairman: And the other point is that I understand that despite this technological world we live in, we cannot post them on the web site for the public accounts committee. I'll therefore read out the web site of the chief information officer. I believe www.info2000.gc.ca is your address, is it not?

Ms. Linda Lizotte-MacPherson: Yes, it is.

The Chairman: I would therefore ask that you post this particular document on your web site so that people can access it if they so desire.

Ms. Linda Lizotte-MacPherson: Mr. Chairman, in addition to that, it has been brought to my attention that we have enough hard copies in French and English to allow us to distribute the report to members today, if that would be useful, along with a few copies of the householder. Additionally, I would like to make an offer to members. If they do have problems, they can personally contact me if they're looking for some information. I can make my phone number available after the meeting.

The Chairman: And again, the web site is www.info2000.gc.ca.

Mr. Desautels, we'll turn to you for some closing remarks.

Mr. Denis Desautels: I'll be very brief, Mr. Chairman.

First of all, let me say that I'm quite pleased to say that I believe the government is acting on most of our recommendations. In fact, the rate of progress has been accelerating in the last few months. I believe we all agree, though, that it's important not to let up during 1999, particularly on the 48 government-wide mission-critical systems or functions. I also believe it's important to also pay attention to individual departments, agencies, and crown corporations throughout 1999.

• 1720

One of the important issues that has come out is the need for good communications during 1999 with this committee and the rest of the members of the House. I think the report Treasury Board Secretariat has prepared is a good base for communicating to MPs, in general. Like everything else, it is always possible to provide more information and provide it differently. If anything, there would be some advantage in providing more information, as some members have said, on the actual functions, as opposed to an average by department. I think that degree of detail could also be supplied.

Having said that, I hope it will be possible for members of Parliament to obtain from the Treasury Board Secretariat additional information based on this particular report. I don't think we want to make the report too heavy or detailed, but it could serve as a basis for inquiries by members of this committee to the Treasury Board Secretariat.

The Chairman: Okay. Thank you, Mr. Desautels.

This meeting stands adjourned.