INDY Committee Meeting

STANDING COMMITTEE ON INDUSTRY

COMITÉ PERMANENT DE L'INDUSTRIE

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, December 8, 1998

• 0903

[English]

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

I want to welcome our witnesses here today. From the Federation of Canadian Municipalities, we have Mr. James Knight, the executive director; and we have Mr. George Terry, the vice-president of information and technology, Ontario Clean Water Agency, on behalf of the Canadian Water and Wastewater Association.

We're very pleased that you were able to join us this morning. We've been having a number of hearings on the year 2000 issue, as you're aware. We did an interim report last May and we're in the process of doing a second report for some time in February when we return, so we need to have our hearings done before we break. We're pleased you were able to make it today.

I'll ask you both to make your opening statements, and then we'll question you both at the same time, because some of the questions may be to each of you, or you may have a comment on all the questions that are asked.

I'll begin with Mr. Knight, please.

Mr. James W. Knight (Executive Director, Federation of Canadian Municipalities): Thank you, Chair.

We appreciate this opportunity to share the municipal experience on Y2K with the committee. I note the committee is already well equipped with municipal expertise in the person of Eugene Bellemare, who of course was a councillor in Gloucester in the Regional Municipality of Ottawa-Carleton and has been a long-time participant in our affairs. So I think you probably got an inside track on the municipal dimension of this issue in advance.

• 0905

I have to tell you that for the past two or three years this issue has not been appearing strongly on our radar screens. Our members have not come forward with concerns. They have not submitted resolutions on this question and they have not brought forward the issue at our meetings in any strong way at all.

I guess in the past few months we've begun to wonder if the municipal world is sleepwalking into a disaster or if they're well prepared on the matter. We have begun to conduct some preliminary investigations to determine the state of preparedness. We've been in touch with many cities across the country and can offer a perspective on where things stand today.

Of course, municipal services are very close to home and very practical types of services. If they fail, there is an immediate problem. When the services of other governments fail there is inconvenience perhaps, but there's not an immediate safety threat or a looming disaster. But if your water doesn't turn on, your sewers don't work, your traffic system doesn't work, your fire protection system fails, or your police systems fail, then you have a problem immediately. So it is really very important that municipal governments are prepared because these services really support daily life in our communities.

I suppose we could, for purposes of discussion, describe two types of municipal governments. There are those large cities and substantial municipalities with complex and integrated systems, many of which rely on software programs that are customized and tailored to the needs of that individual municipality.

Many of these programs are quite old. They were perhaps written many years ago and have evolved with time, lasting far beyond the expectations of their original authors. These systems clearly are the most vulnerable. They need to be thoroughly overhauled and reviewed, and they present the greatest challenge.

The other broad class of municipal governments is the smaller communities whose services are fewer, whose systems are less complex, and who may rely primarily on off-the-shelf software operating on PCs.

There are shades of grey and many other issues, but generally speaking we can imagine that the smaller communities with less complex systems, operating with off-the-shelf software, will be able to manage their problems. At worst, they can throw the whole system in the garbage, get new PCs, buy new software and get on with life.

The very heavy expense will be in those large municipalities that have very complex systems. Part of our inquiry, in preparing for this meeting, was to do a quick survey around the country to see how the major cities were coping with this challenge. I've come equipped with piles of reports from a variety of cities, including Ottawa-Carleton, Toronto, Calgary and London, for example.

We're finding that the cities are well aware of the problems they're facing and have taken a variety of steps to address them. They've allocated substantial resources—in one city it's $150 million—to get on with the fix. The evidence suggests to us that in all cases we're aware of, we can conclude that strong action is under way and there will be appropriate preparedness.

We also note the cities will be on a state of alert on the eve of the new millennium and will have extra staff in place. If automated systems fail, they will presumably have staff in place who can override the systems in manual ways.

• 0910

So we're not feeling comfortable, but we're not feeling great anxiety. Municipal management is a very practical form of management; it's overseen by councils that are accessible by the population—your next-door neighbour may be your councillor. Clearly, there's a high political priority on ensuring the continuity of services, and we believe, therefore, there is a high level of management concern and focus. And as I've said, in most of the cities we've heard from there's a high degree of investment.

In many cases, these bigger cities are also providing support to smaller communities in their areas or in their provinces. For example, the City of Calgary has had an executive director responsible for this issue for some time now, and that individual is in touch frequently with municipalities in Alberta, sharing the expertise of the City of Calgary with other communities in that province.

Also, many of the cities that have prepared significant research reports have put these reports on their home pages and shared them in that way, not only across the province but across the country and internationally.

So there is a perspective. It is, I would underline, not the responsibility of FCM to oversee municipal administration. Our role as the national municipal association is to convey policy messages to the Government of Canada on things that municipal governments would like to see by way of federal legislation or regulation, and not to supervise intimately the 4,400 municipal administrations across the country. However, because there have been so many questions of us, we have undertaken this preliminary research, which gives us a level of comfort—at least we have not perceived the need to be highly distressed about the issue.

So, broadly, that is a national perspective, and I think I'll leave it at that. We've brought some staff along to answer any particular questions you may have.

Thank you.

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

Mr. Terry, please.

Mr. George Terry (Vice-President, Information and Technology, Ontario Clean Water Agency, Canadian Water and Wastewater Association): Thank you. I'm happy to be here today as an industry representative of the Canadian Water and Wastewater Association.

The Ontario Clean Water Agency operates more than 400 water and waste water facilities across Ontario, and our range of Y2K problems basically represents fairly all the types of problems being faced across the country.

All municipalities in Canada have a responsibility to provide safe, effective, and efficient water and waste water services to their residents. Our business is to provide these water and waste water services in a safe, reliable, and cost-effective manner to the Ontario municipalities that are our clients, and to ensure environmental compliance, which is extremely important to the entire water and waste water industry across Canada. The international standard for environmental management systems, ISO 14001, was established in 1996. To meet ISO 14001, an organization must work beyond legal compliance, and it must have an organized and systematic approach to meet its environmental responsibilities.

This past April the Ontario Clean Water Agency achieved ISO 14001 registration for the water system for the Regional Municipality of Peel, making it the first such system in all of North America to achieve this standard of excellence in the industry.

The agency's experience and achievement of operational excellence in water and waste water services means we understand fully and are familiar with the issues facing the municipal water and waste water agencies in meeting the challenges of Y2K, and we feel comfortable speaking on behalf of the municipal water and waste water agencies across Canada.

Utility systems such as water and waste water are largely controlled by computers, PLCs—or programmable logic controllers—human-machine interfaces, and a variety of sensors, scales, flow meters, pH meters, and other instruments. Any or all of these could be affected by the Y2K.

The Ontario Clean Water Agency has a team in place to resolve the year 2000 problem. The focus will be on the potential impact of Y2K on operations of our clients' water and waste water facilities, as well as our office and corporate support systems.

Municipalities that are not our clients and those in other provinces also have Y2K teams in place. The comments that follow apply equally to them.

The Y2K resolution process spans several phases. The first is awareness: ensuring that all our agencies and municipalities, our clients, our vendors, users, and management are notified of the potential problems, and that the proposed plan of resolution includes clients and all suppliers of service. With the Ontario Clean Water Agency, we have been proactive in this regard and we have been talking to all our clients.

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The next phase is assessment: compiling a comprehensive inventory of all software and hardware in order to determine their Y2K status. All of our facilities have had their inventory completed, and all Y2K-suspect equipment has been documented.

Then there is is validation: developing plans for testing and identifying software and hardware, contacting vendors, and requesting certification of Y2K compliance wherever possible. OCWA has a database of all Y2K-compliant components and is also auditing all of our facilities to ensure that the testing protocols are in place to make sure that when Y2K turns over, our instrumentation is up and running.

The next phase is recommendations: reviewing test results and making recommendations on how to proceed should any Y2K compliance issues arise. We are sitting back down with our clients, our municipalities, and making sure they understand what we can achieve and how we can take this and not only make it a Y2K opportunity but increase our ability to do our contingency planning, work with our clients so that they fully understand how we can address in a safe manner the Y2K concern.

Then there is the implementation phase: developing a comprehensive schedule, including contingency planning recommendations and the implementation of solutions, and a thorough review of all contingency plans and operating procedures. The Ontario Clean Water Agency is very proud of its contingency planning capability. During the ice storm of this year, not one of the Ontario Clean Water Agency's facilities was unduly affected. All of our facilities were up and running. Our water and waste water services continued to run, even though many of our municipalities were in the affected area.

Assessment and validation of our clients' systems are currently proceeding across the province, and the same applies in non-client municipalities both in Ontario and across Canada.

We're working with the CWWA, with the Ontario Water Works Association, and with the American Water Works Association, to ensure that if clients want access to resources or additional information on how they can better prepare for Y2K, that information is made available to them.

We and non-client municipalities in Ontario and municipalities in other provinces are finding some systems that are Y2K non-compliant. Our solutions range from a temporary fix, like a standard clock set back to ensure that it runs over the 2000, to a full system replacement. The replacement of old non-compliant systems is expensive, but it offers the benefits of better control and increased automation.

Realistically, today your automation cycle is probably less than five years. Most equipment you purchase, you're going to update within five years anyway. Yes, there's a cost to it, and many municipalities have to backdate some of their forecasted capital expenditures to include the Y2K issue, but this expenditure would take place somewhere down the road.

Providing our clients with an assessment of their facilities' Y2K compliance status and reporting on the potential impact on their facilities will mean that municipalities will be able to better understand the issues and consider cost-effective solutions for their individual systems. The assessment processes being conducted by non-client municipalities in Ontario and municipalities in other provinces is generating the same type of results—a better understanding of their systems, and plans to develop and implement cost-effective solutions.

Part of ensuring that municipal water and waste water services are Y2K compliant involves working with other municipal service sectors, such as fire departments, police and health services, to ensure that an integrated approach is taking place. The Ontario Clean Water Agency has begun these discussions and will continue to participate in these community involvement approaches. Similar integrated approaches are taking place in all municipalities.

Water truly is our most important resource, and it is our responsibility to ensure that the provision of water and waste water services continues uninterrupted as we head into the new millennium.

Thanks.

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

We're going to begin questions, with Mr. Jaffer.

Mr. Rahim Jaffer (Edmonton—Strathcona, Ref.): Thank you, Madam Chair.

My first question is directed to Mr. Knight. You said in your opening statement that in your dealings with the municipalities, the issue of Y2K is not often something that comes up; it's not really discussed. You went through what sort of things are being done, but in your opinion, does the awareness amongst municipalities seem pretty high? Is it a concern that they do have when it comes to looking at this problem in this new year?

The question is, is awareness there across the board?

Mr. James Knight: I think it is. We have worked on that aspect, and we have a magazine and other information that we circulate, and a trade show at our conference. In all of these communication devices, we have featured the issue very prominently to ensure that municipal politicians and senior managers understand that this is something that has to be dealt with.

• 0920

Not only in our own publications, but very broadly, there is so much publicity about this that any manager has to be aware of this or they're unconscious. Municipal managers are of a high quality; they're not unconscious. I think they're well aware of it. But we will continue our communications program.

I suppose if I were to have a concern, it would be for the quite small communities that would not benefit from the same high standard, or highly educated type of management. There may be some issues there. But the fixes are relatively simple. So that gives us some comfort.

Mr. Rahim Jaffer: On that level too, it sounds like there is some organization within your organization to help municipalities gain awareness and for you to sort of work with them. I'm curious. To your knowledge, has there been any sort of interaction with the federal government and municipalities to create awareness at all? What have you experienced on that level?

Mr. James Knight: Yes, we have certainly been in touch with the various federal efforts in support of Y2K preparedness. Most recently, we've been in touch with people in the new Industry Canada office. I believe the assistant deputy minister is Guy McKenzie, if I'm well informed. I had a meeting with people in that office recently.

Interestingly, there are federal-provincial meetings on this issue. At the last meeting, the provinces suggested that the FCM could perhaps play a role in ensuring information dissemination at the national level. So I have been invited to the next federal-provincial meeting on this issue, which is on December 16, to report on what we know from the municipal perspective.

I think there's quite a lot of communication among governments at all levels. Certainly over the past few months we've been in touch with all of the centralized federal efforts in this respect.

Mr. Rahim Jaffer: My final question is this. You also mentioned there's strong action taking place in many of these municipalities. To your knowledge, is there some sort of a checklist they're following or some sort of plan set out maybe by you or by another organization that they follow? Has there any sort of action plan taken place on that level?

Mr. James Knight: We haven't prepared such a checklist. But a number of cities have done done this. I have the checklists from Toronto, Calgary, and Ottawa-Carleton. These are on web sites, so they're being shared nationally.

Mr. Rahim Jaffer: Okay, thank you.

Will we have another round later?

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

Madam Jennings.

Ms. Marlene Jennings (Notre-Dame-de-Grâce—Lachine, Lib.): Thank you.

Thank you very much for your presentations.

I have a real concern. I lived through the ice storm. My constituents lived through the ice storm. My riding was probably the hardest hit on the Island of Montreal. I represent Notre-Dame-de-Grâce—Lachine.

One thing became very clear. Before I got involved in politics, I worked in public security. I'm aware of the Department of Public Security at the provincial level and the whole issue of public security and having contingency plans in case of emergencies. Yes, it's the responsibility of each municipality. But the provincial government has a really strong role in terms of guiding that.

We had some major failures in Quebec. Although I can't talk about Ontario, in Quebec, at the municipal level, there are significant-sized municipalities. I'm not talking about a population of 5,000; I mean cities of more than 60,000 or 75,000 that had absolutely no contingency plans. They basically looked at the provincial government and said that they were responsible for public security. But the provincial government really had no specific contingency plans. And they said the municipalities were responsible.

In Montreal, we had a major failure in terms of water. You must have been aware of that. They did not publicize the fact that one of the water purification plants was literally down, so the water was contaminated. It was a number of days before they actually made it public. They began to urge the neighbourhoods that were directly affected to not drink the water.

• 0925

In my riding, because of my network, we became aware of it before the public did. So we were able to tap into water companies, like Laurentian Water, and get an actual truck to come into our neighbourhood. It stayed there with a generator. People were able to go with their plastic bottles. We got a company to provide us with plastic gallon jugs.

So I'm concerned when you say that everything seems to be okay because it hasn't been raised at the federation. It doesn't seem to be a major concern. It seems to be something that the municipalities are dealing with.

When I see that the Montreal Urban Community, particularly the City of Montreal, which is one of the largest cities in Canada, was not adequately prepared for a major emergency, I get concerned, knowing the implications of the Y2K problem.

So I'm pleased that you will be participating at this table with federal and provincial representatives. But I'm wondering if the federation shouldn't be taking a more proactive role. It should be proactive not in the sense of ordering municipalities but in terms of disseminating the information to ensure that every single municipality that's a member of the federation has the information and could possibly provide them with names and addresses. So say they're too small to have the resources. If you know Toronto, a mega-city, is already involved, you can provide them with people who can provide that expertise.

I'm really concerned. The statistics came out about two months ago from the health board for the Greater Montreal area and for what we call the Montérégie, which were two areas that were hard hit. It has been shown that there was a significant increase in deaths among what we would call the vulnerable population, who are seniors and people who suffer from respiratory problems. Health officials have directly related it to the fact that people lived 10 or 12 days without heating.

So I'm asking you, don't you think that perhaps the federation might look at having a more proactive role in this?

The Chair: Mr. Knight.

Mr. James Knight: I think your suggestion is appropriate. Despite the fact that our members haven't urged us to do this, we are focusing more on this. In fact, quite independent of this meeting, the next issue of our magazine will feature this as its theme. The use of the Internet as a device to exchange information is something we're encouraging.

I would cite a major difference between the ice storm and the Y2K problem. The major difference is that the Y2K problem is foreseen while the worst ice storm of what will soon be the previous millennium was clearly not foreseen.

One positive outcome of the ice storm was to stimulate emergency preparedness planning in those municipalities that weren't prepared. There were some that weren't as well prepared as others. I would say the provinces were less prepared. That would be my perspective. The provinces, in some cases, were almost unhelpful in those circumstances. In a disaster of that nature, it fell very much to the local communities to solve their own problems.

But clearly the experience of last January has focused on the need for emergency preparedness. And there have been a lot of activities, by the way, over the past months in that respect.

This is a problem that we know is on the horizon. Leave is being cancelled. Staff will be on deck just waiting there to see what happens and being in place to deal with it immediately.

Ms. Marlene Jennings: This is my last question. It will be very short.

This reassures me. However, the other issue is the smaller municipalities that will simply buy their computers or software systems off the shelf. A lot of people are counting on doing that. There's the danger that there will be shortages. Is that being addressed as well?

• 0930

Mr. James Knight: You're quite right about that. Most of these systems have... I'm talking about the service system; I'm not talking about the administrative side and keeping the tax bills flowing. We can all live without our tax bills, but we can't live well without our water supply, waste water treatment, or solid waste disposal system.

Most of those systems do have manual overrides, and they can be done in a non-automated way. I do acknowledge the very serious problem of embedded chips. None of us is quite sure what that might mean. Undoubtedly, there will be delays and interruptions. But the staff will be in place to deal with it in advance, not after the fact.

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

Mr. Jones.

Mr. Jim Jones (Markham, PC): There are more than 4,000 municipalities here. If I asked you where you're going to have a problem, you would say you don't have a clue. Wouldn't it would be nice if we had some type of...? I know about some of the activities in terms of what the Federation of Canadian Municipalities does. You probably have a lot of activities you have to do next year. But probably the most important activity is preparing this country for the 21st century.

You said people are going to be waiting around. We're already prepared. We're going to be waiting around to see if something is going to happen.

I think we should be taking a proactive stance. We should be tracking the 4,000 municipalities. We should be making sure they've all done the proper stuff. Then we might start to see areas of similarity where people are not ready.

We don't even have a clue what areas are not ready. It could be in New Brunswick if all the water systems are not okay. It could be out in Manitoba if the hydro is not ready. We have to somehow get some type of reporting mechanism so we can have an idea of where we have problems. Then we can put people into those areas to solve them instead of waiting for it to happen.

Mr. James Knight: With all respect, I don't think spending $150 million in advance by one city is waiting around. The investments of municipal governments in this problem in advance are very considerable, amounting to billions of dollars. That's not waiting around. However, some of these problems are elusive. Some of these chips won't be found. You can't tell from the code number on a chip whether or not it's Y2K compliant.

There is a question mark. In order to deal with that, you need to have people ready on the spot to deal with the problem. I'm sure the waste water people will be there. If the automated chlorinating system doesn't work, then somebody will be there to do the manual override.

It's inaccurate to characterize the current situation as one of waiting around. There's a very substantial investment. There's a great deal of concern about preparedness. But still, problems will undoubtedly occur that are not foreseen.

Yes, we concur that this issue must be a strong one on our agenda. We do not have the capacity, however, to supervise 4,400 municipal governments. It's quite beyond us.

There may be a case for more provincial intervention or supervision, particularly in the case of the very small municipalities. But in the small municipalities, remember that there's more capacity for self-reliance. They're not dealing with a very huge, very complex, very integrated urban system in which people are very vulnerable. You're looking at a smaller environment where people are more used to sorting out their own problems and dealing with issues.

I will raise this issue on December 16, when I meet with the provincial governments for the first time. I want to know better what they are doing. From the distant perspective we have, we could say that in some cases they're not doing a great deal. It would be interesting to hear from them about what their plans are.

The Chair: Mr. Terry, did you have any comments with regard to the water system in terms of Mr. Jones' question as to the state of readiness in the different provinces? Can you talk on that at all?

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Mr. George Terry: All the provinces and municipalities have developed Y2K teams. They're all in various states of Y2K readiness. The Ontario Clean Water Agency, as I mentioned, has a very strong contingency plan in place for Y2K.

Our plan primarily is to roll back to fully hard-wired operations or fully manual operations prior to the Y2K turnover. We want to make sure that all of our systems will have been fully Y2K upgraded by September 1999. That means we will have gone through all phases of our plan to ensure Y2K compliance. We're an essential service, and we recognize that fact.

As a secondary safeguard, all of our utilities will do a two-week trial on manual operations prior to September 1999. The purpose of this is to ensure that people are retrained. We're going to re-evaluate our contingency plans. We're re-evaluating our operations manuals to make sure we entrench in each person any concerns we have during this manual time. We have put together a schedule that allows us to make sure suppliers are notified, chemicals and fuel oils are on site, and vehicles are checked.

For those of you who may not know this, most new vehicles have up to 50 microprocessors on board. So you have to even check right down to the level of vehicles being up and running should this event take place. Mr. Knight has spoken primarily about firmware. It's not known at this time whether or not many of the chips in cars and other vehicles and in your computers are will be Y2K compliant.

First, I don't want people going away from here worried about the water and waste water industries not recognizing Y2K as a problem and not moving quickly to get it addressed. We're not only moving quickly, we're making sure our contingency plans are trialled and proofed prior to then.

Where we find holes in the systems—say we require additional generation or additional computers to be available to us—we will make sure that we have that on site. Our staff will be on site with fully manual operations for December. For those of you who don't know, December 31 is a Friday. As such, our holidays are going to be on the Monday. The guys are going to appreciate that a lot, I'm sure. But by the same token, all of our staff will be there and will be ready. They will be fully trained again in manual operations. So those people who grew up with the automated systems will be back to understanding their basic operations.

Our plan is to make sure that every water tower and reservoir is full as of 10 a.m. on that Friday night. Every sewage lift station's pump well will have been pumped down to zero. So if we have an event that takes place, we'll be ready for it.

Now, our plants will go off the grid at 10 a.m. on December 31. They will be slowly phased out. We will go to manual operations on full generator backup. I really believe that Ontario Hydro is going to be in a place to actually provide power to all of our municipalities. We're just safeguarding our instrumentation in this regard.

As we come to January 1, we're going to start to phase back our instrumentation in steps. That's all part of our contingency plan. Then we'll bring our plants back on into service.

That's our plan to date. We have made this available to other municipalities. We're working with the environment ministry to address those municipalities that aren't directly affected by the Ontario Clean Water Agency and also the ones that may not be our clients, because we truly only run 30% of the province of Ontario. That's just so you know.

Does that help?

The Chair: Thank you, Mr. Terry.

I just want to alert you to something that was brought to the committee's attention. I'm sure everyone's kind of cringing from your statement that you're going to go to full power based on generators on December 31. We were told very clearly by Ontario Hydro and the Atomic Energy Control Board that the worst-case scenario is for people to go off and use their regular state of power. If you're going to do this, you need to let them know. If people all shut off their power, it creates a surge in the system, which is worse than the other possibility. It's very important that you deal with Ontario Hydro. Maybe you're already doing that. But they were very clear to us that they didn't want people to shut off their power, because it was going to cause all kinds of problems in the systems.

Mr. George Terry: That's fine from Ontario Hydro's perspective. I've spoken to Ontario Hydro on this issue. They recognize that we're an essential service; we have no choice. With all due respect, I have to ensure that my clients have water and waste water services the next day. Nobody cares what happens regarding how I get there.

I've been working with Ontario Hydro to make sure that at the end of the day they know I'll phase my plants off. As a matter of fact, I have already spoken to them about a scheduled phase-down so that they know I'm not going to slap their grid.

The Chair: That's the point.

• 0940

Mr. George Terry: That's so you know. It's not only Ontario Hydro; not only am I working with the emergency measures office to offer additional assistance to their municipalities that may come into some conflict, but I'm also working with the military to make sure that if they have a water problem we can help.

The Chair: Last question, Mr. Jones.

Mr. Jim Jones: If there are 4,000 municipalities saying they're ready, it would be nice to have some type of audit or SWAT team set up by municipalities. Let's say Ontario has 1,000 municipalities and they all say they're ready. Go in and have that SWAT team audit 50. We'd see what the results of that audit would be, and it would really give us a good idea of what could happen in the year 2000. Companies spend $150 million. I'm hearing federally they're spending a lot of money, but still they haven't done any testing. They're spending all this money getting ready, but they're not testing it. And without testing it, you haven't proven anything.

When we look at a corporation and we say that the financial statements are presented accurately, an auditor goes in there and validates all that information. When a municipality says they're ready, there should be some type of audit mechanism just to go in and recheck to make sure things are ready.

Mr. James Knight: Certainly one of the things most cities are doing is testing their systems, running the dates ahead and seeing what happens, and that's very much a part of the preparedness process. But in fact, there is no authority...municipal governments are independent corporations. They're responsible for their own actions. They have a council that has a democratic mandate to provide services, and they do that extremely well. They're very good at it. Your municipal services you can count on 99.99% of the time, so I wouldn't think that some higher authority should move in and—

Mr. Jim Jones: I'm not suggesting a higher authority. I'm suggesting the peers of the various municipalities. So let's say I'm an expert on—

Mr. James Knight: Yes, fair enough.

The Chair: Mr. Jones, we have to move on. I think Mr. Knight's already answered that part of the question.

Mr. Shepherd, please.

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

I would reiterate that a report card system is not as intrusive, but if everybody could get on board and it helps them with a little bit of rivalry between municipalities in terms of who's on board and who's not...

My question relates to resources, and I know you've touched on that on a number of occasions here today. On my way in here this morning, Ottawa-Carleton was saying that they're short $53 million just to run their basic services. It's their ongoing complaint with the Province of Ontario. Although I know you've mentioned that one city, I assume it's Toronto, is spending $150 million, the reality is... And I only know this from going into hospitals in my riding, and they say, “Yes, we've identified this equipment and there's only one thing missing here, we don't have any money. We don't have any money to replace it; in fact, we don't even have any money in our budgets to identify it.” So even though you may have one municipality that you think is away ahead of it, what is the real state of preparedness and what is the accessibility of resources to these municipalities?

Mr. James Knight: There's no question that in the past few years municipal resources have been under tremendous pressure. The federal government has reduced its deficit, the provinces have reduced their deficits, and municipal governments are left with a lot less cash and the same demands for services. It has been a very difficult time, there's no question about that.

But on this issue, it's clearly a priority. If the services fail absolutely, it's an extremely unfortunate and unacceptable situation. So Ottawa-Carleton has a particular issue with the Province of Ontario right now that gives it this $53 million problem, but Ottawa-Carleton has already spent $60 million on the Y2K problem. I don't want to explain away or minimize the import of your comment, which is very true. It's an extremely tough time for municipal governments, but the imperative of delivering basic services is extremely strong, and the prospect of those services failing is politically unacceptable. And it's unacceptable from a management perspective too. So this issue is clearly a priority issue.

• 0945

Mr. Alex Shepherd: I guess if I were in municipal politics I might think keeping the water on today or keeping the roads plowed of snow is today's problem, and if it came into scarce resources, maybe I wouldn't be putting a lot of money into something that maybe is not going to happen two years or a year and a half from now. This is what really bothers me, because the more we delay those decisions the less likely we are to achieve them. I'm familiar with the province of Ontario, and we're going through this restructuring just at the very time that this Y2K thing is going to hit. I listen to my local municipalities and they're saying they're concerned about social housing and other things. Quite frankly, I don't hear them talking a lot about Y2K, to be honest with you. Maybe, getting back to the idea of a report card, it would be worth while to go to some of those municipalities and say, “Just where are you in this system?”

Mr. James Knight: That's a useful suggestion for sure, but just because a municipality is not making a lot of noise about Y2K does not, for a minute, suggest it's not prepared. There's almost nothing said about it in this region. I've not heard a great deal about it on the radio or read about it in the paper, but Ottawa-Carleton has dedicated staff on Y2K. They're a leader on this matter and they're investing a large amount of money on it.

Mr. Alex Shepherd: We say a large amount of money. You say $60 million here and $150 million in Toronto. For all I know, this is a $500 million problem in Toronto and a $250 million one in Ottawa-Carleton. What really bothers us is that we don't really have a handle on it.

Mr. James Knight: Municipal services have always been reliable, haven't they? Truly, they're there for you. And I don't have a sense they're going to fail you on January 1, 2000. I think there'll be some stresses and some strains and there will be some manual overrides, but there's a clear fix that this problem is out there and it's being addressed quite aggressively.

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

Mr. Jaffer.

Mr. Rahim Jaffer: I have a few questions for Mr. Terry, actually.

You mentioned that there were these teams set up across the country as well, not only here in Ontario, to deal with water systems. They're checking the systems out and making sure everything will be operational after the year 2000 hits. It sounds as if the magnitude of that, to prepare and be ready for everything, is quite a large task. I'm curious as to whether in the preparation process there were budgets put aside for many of these areas—for instance, I know you could speak of Ontario—to deal specifically with Y2K compliance or whether this was taken out of existing budgets to prepare for all of this.

Mr. George Terry: In many instances it would be a capital expenditure to the municipality. As you know, with Y2K it's a tough sell because there's no ROI on Y2K. The basic premise here is that we have to sell the municipality on doing business in the year 2000. That's what your return on investment is. Many municipalities realize that this has to be done. To speak with Mr. Knight here...our municipal services in Ontario and throughout this country have always been dependable, and we pride ourselves on the fact that we're prepared for when the year 2000 rolls around. Some municipalities have budgeted in their capital allotment for Y2K. Other municipalities have taken it out of existing revenue. And you're quite right that many municipalities have just perhaps not budgeted enough for it or have not seen that far down the road to have a nest egg put aside for Y2K.

Mr. Rahim Jaffer: You mentioned the issue of the ISO standards. I was curious—it just came to mind—as to whether or not the ISO certification process included the Y2K compliance recently, because I would imagine that would encourage many organizations and companies to include it as part of their mandate when they're trying to get certified through the ISO procedure. I don't know if you can tell me anything about that or if in fact it's something you're aware they've included within their certification process.

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Mr. George Terry: I don't believe at present they've included it through their certification program.

The benefit of the ISO standard is in the development of contingency plans and ensuring that every piece of equipment, everything that has to do with your environmental compliance side, has been looked at, properly documented, and a system or contingency plans are in place to handle worst-case scenarios.

The other side of Y2K is the ability of your municipality to truly put a crisis plan in place. When this is all done and Y2K comes and goes, you're not really losing anything. The plan you put in place for Y2K will be there for the next ice storm, for the next major event that happens in your municipality. I know there's a huge cost coming forward with Y2K, but this isn't lost money; this money is invested in the staff who operate your essential services.

The Chair: Thank you, Mr. Jaffer.

Mr. Lastewka.

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

I have one question to Mr. Terry, first. You talked about having to ensure that all the vehicles are ready, and so forth. It's my understanding from the vehicle manufacturers, and they have confirmed, that there are no Y2K problems except if the purchaser has put special equipment onto the vehicles.

I would like to request from you that we be notified if you find a problem with vehicles, because we have been told by the manufacturers there will be no problem with embedded chips in vehicles.

Mr. George Terry: I haven't received anything back from Ford of Canada, but as soon as we get all our information back, I'd be more than willing to share that information on our web site.

Mr. Walt Lastewka: Thank you.

Mr. Knight, what is the purpose of your organization?

Mr. James Knight: We are the municipal voice in Ottawa. We recommend legislative or regulatory actions to the Government of Canada that will benefit municipal governments. That is our prime raison d'être.

Mr. Walt Lastewka: Some of the questions we've been asking you today maybe belong to the provincial organizations and municipalities?

Mr. James Knight: They have a closer relationship on administrative issues with their members, although all of those associations are members of FCM also, so we are in close contact with them on these issues.

Mr. Walt Lastewka: You leave me with the reaction that you're putting in reactive plans rather than proactive. I know you've mentioned the larger organizations, but our concern is right across the whole spectrum. In fact, when the Department of National Defence tries to pick priority of areas that might not have had enough preparation for Y2K or enough contingency in Y2K, one of the items they have to identify is, where are those areas across the country? I would have thought, and maybe incorrectly, that you should be assisting in that area of identifying regions across Canada or municipalities across Canada where there are problems, and I didn't get that from you.

Mr. James Knight: You're quite right, we do not bear responsibility for municipal administration. Municipal corporations are autonomous, and they are responsible in the end for their own administrative structures and actions. We can play a useful role in encouraging them to take specific actions to alert them to problems, but at the end of the day, they are independently responsible.

The Chair: This is your last question, Mr. Lastewka.

Mr. Walt Lastewka: I'm going to carry on with what Mr. Jones said. Don't you think you should at least have an indication? Have you gone through the five steps, at least? Have you tested? And have you put a contingency plan in place? Trying to get feedback on that would, I know, inspire some municipalities not to take the attitude that they can buy things at the last minute and they can throw people at it.

Mr. James Knight: We have no indication that municipalities have that attitude. We have surveyed quite a number of them, and we find that everyone we've surveyed has been proactive, has an office coordinating activities and has invested considerable money, and that gives us a great deal of confidence.

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Undoubtedly a few will slip through the cracks in some areas. But as Mr. Terry has explained, planning for contingencies, preparing for problems, even having gone through all the steps, they're still going to be on emergency response mode at the appropriate time.

The Chair: Thank you, Mr. Lastewka.

Mr. Bellemare.

Mr. Eugène Bellemare (Carleton—Gloucester, Lib.): Merci, madame le présidente.

Mr. Knight, you have the capacity for surveys. You often do this. Have you done a survey at all?

Mr. James Knight: Yes, we have done some telephone surveying of selected members.

Mr. Eugène Bellemare: Have you done any written surveys à la Gartner Group? You've heard of the Gartner Group?

Mr. James Knight: Yes, we have.

Mr. Eugène Bellemare: They have a program called COMPARE rating scale. It's a compliance progress and readiness scale that can easily be used. You ask municipalities when they started Y2K projects and whether they have adequate funding and staffing. I'm not sure if it's still the time to do this if it's not done, but I'm not sure when you have your next publication. Would it be possible to do such a survey?

Mr. James Knight: Well, as I said, the next publication indeed focuses very much on Y2K issues, and—

Mr. Eugène Bellemare: But often these issues—

Mr. James Knight: Let me explain that in addition to the FCM, there are professional groups in a wide variety of municipal areas. There is the Canadian Association of Chiefs of Police, and they are ensuring that police systems are ready. There is the association of fire chiefs, and they are working collectively on fire issues. There is an international association of municipal clerks that is working to ensure that voting systems and council administrative systems are in place. There is an association of municipal engineers. There is an association of municipal planners.

I could go on at some considerable length. There is an association of municipal administrators, both a Canadian association and an international association, and all of them—all of them—have committees, have reports, are putting out videos. One can collect libraries of information on this matter in the municipal sector alone.

Mr. Eugène Bellemare: Thank you.

The Chair: This is your last question.

Mr. Eugène Bellemare: Mr. Terry, have you done such a survey as to the state of readiness, the risk assessment and established mission-critical activities that are probably going to go wrong, not possibly going to go wrong?

Mr. George Terry: Through the Ministry of the Environment we sent out a survey four weeks ago to all the municipalities in the province of Ontario. We're hoping to have results back shortly to gauge the state of readiness for all the municipalities in the water and waste water—

Mr. Eugène Bellemare: Could the committee get a copy of that?

Mr. George Terry: As soon as it's brought forward, you're more than welcome.

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

I want to thank you both for being here today. I want to also alert you that unfortunately the Canadian Police Association was unable to be here today. Originally that was supposed to be part of the discussion. The CPA has submitted a letter that's being translated to be distributed to committee members.

But the major concern was about municipalities and water, and the fact that from their interaction they don't see a lot of progress in a lot of areas.

And please, Mr. Terry, you represent 30% of water in Ontario; I'm concerned about the other 70%.

And you should be aware, Mr. Knight, that as chair of this committee I met with some of my municipalities in June, and they hadn't done anything. They didn't see it as their concern or their problem in—

Mr. James Knight: Amherstburg?

The Chair: Not Amherstburg specifically. Amherstburg has it's own emergency preparedness plan because of Fermi 2 being right there. So Amherstburg is very different.

I'm more concerned about the larger municipality of Lakeshore. It's a new amalgamated municipality. Their concern was amalgamation. At the time, they were buying computer programs and hadn't even taken the Y2K issue into concern as something they should be aware of as they renewed or bought new computer programs. At least the person who was designated for that purpose did not take that into concern.

So I will personally pursue my own municipalities' plans, and I'm sure all the members of this committee will do the same.

Mr. James Knight: Chair, was that Chatham—Kent Essex? I'm sorry, I didn't hear the name.

The Chair: It's part of the riding of Essex, and it's Lakeshore. Mr. Shepherd raised a very good point you should be aware of: a lot of municipalities have been amalgamating, and that's been their focus and concern. It causes us great concern in this committee and in the province of Ontario.

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As you're saying, your magazine is going to be doing it. We'd all love to have a copy of your magazine—

Mr. James Knight: Certainly.

The Chair: —and I hope you'll follow up on some of the suggestions about a checklist for municipalities.

I'll give you an example. The air navigation industry recognizes that not all airports, although they're responsible for their own administration, can deal with the Y2K issue, and it has sent them kits: here's how you get ready, here's a checklist, here's what you have to do, and here's a video.

Different associations have taken different responsibilities. I realize that yours isn't necessarily...maybe it's your provincial counterparts, but there needs to be a fuller discussion here, because as we prepare contingency plans and emergency preparedness plans through National Defence, we need to know where the problems could be.

I think Madam Jennings said very clearly what happened in Montreal. You can prepare, Mr. Terry, but if every municipality doesn't have a backup generator for their water system, there's still a potential.

As much as we all have faith in Ontario Hydro, there could be a grid failure that's larger than Ontario Hydro. It could be something over which they have no control, and it will cause many municipalities a lot of problems if they don't have backup plans and backup generators.

I think it's a real concern that somehow through your provincial...you have to get organized with some type of system so that we know, and everyone knows, who's not getting ready and what they're doing.

Mr. Knight, I realize it's not your job, but I'm thinking that maybe it's your provincial associations. I'm going to write to them, as chair, on behalf of the committee.

Mr. James Knight: Yes, certainly, where there has been a recent amalgamation, such as Chatham—Kent Essex, or such as, well, Kingston in Ontario...primarily in Ontario, by the way. There's been no similar trend elsewhere; this is an Ontario matter.

The councils of those governments clearly are preoccupied with amalgamation issues, but I can assure you that their management and their IT, fire and police teams are all working in collaboration with their colleagues across the country and working towards solutions to these issues. I know that is the case.

A council may not be aware of all the management focus on these matters, especially where there's been a recent amalgamation. But I would be very surprised if your municipality falls on its face on January 1, 2000—very surprised. That is not consistent with municipal management practice. You have a high level of skill in management. They do not ignore these problems, absolutely.

With respect to your notion of a survey, I'm sure it's already occurred in some provinces. On the 16th I will inquire of the provinces where there has not been a survey, and undertake to encourage them to do that or find a way of doing it. That's a reasonable thought.

The Chair: Mr. Knight, all we're asking is that you pass on a message to the municipalities that they have a responsibility. With all due respect, the head of the municipality is the mayor. If they're not aware, the mayor isn't doing what we've all instructed business to do, which is to have the head of the organization be aware.

So if there's a lack of awareness and if there's no direct involvement in the plan by the council, then there's a problem.

We raise that because that's the message that was passed on from all the senior CEOs who did the private sector task force on behalf of Industry Canada, to bring this issue to the forefront.

We're trying to see if there's another way to get the message out, because I'm telling you that with my own person experience, as members have told of their own experience here today, we believe there are some concerns. You have this magazine; you have a direct link, or your provincial associations do.

Mr. Terry has given us some details on what's happening in his operation. As a committee, we don't have details now on 70% of the water in Ontario...as well as the rest of Canada. So not everybody is operating in the same way.

The police association has written to us telling us that they're concerned, they're interacting, they're part of the emergency contingency plans, and that's their big concern—water. It's a municipal responsibility; it's not a federal or provincial one. I raise it, and we leave it with you.

We're going to continue to monitor the situation, and I'm sure all the members of this committee will look for formal plans from their own municipalities. But, again, we're all trying to work together to solve the problem, as we know you are. We know you have a great ability to get a message out, and that's what we're asking, that you work with us to try to solve the problem.

We appreciate your being here today and being as forthright and frank as you have been. We're hopeful that all the municipalities will operate on January 1, and that we won't be subject to other international problems that will cause them to have failures. We know they can only do so much, and that's all we're asking.

Do you have any final comments, Mr. Terry?

Mr. George Terry: Well, Essex is OCWA, so you don't have to worry about your water facilities.

The Chair: I'm very familiar; I was at the openings.

Mr. George Terry: We'll be up and running.

The Chair: Thank you.

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Mr. James Knight: I can assure you that we will continue to raise this issue and urge our members to continue to prepare.

The Chair: Well, that's all we can ask, and we appreciate that. Thanks very much.

The meeting is adjourned.