Guide to Y2K
For Susan Wild and Rob Kuhn, the year 2000 has come early. In the real world, there are still some months left before Canadians will know whether they face the reality of computer-driven disaster. But inside a locked blue door on the fourth floor of the Toronto headquarters of the federal government weather service, Wild and Kuhn and their colleagues are living the future, eyes fixed on computer screens telling them that 1999 is past tense. On a day in late March, Kuhn watches his monitor as a line of snow squalls moves east towards Thunder Bay, Ont. The snow is depressingly real, unlike the Feb. 29, 2000, date that appears on the screen. Wild's computer shows readings from Environment Canada's 650 weather stations and 30 ocean buoys, again with next year's date. On a wall behind her, a calendar shows the year is 2000.
In similar sites across the country, people are working in two different centuries. This is not some bizarre exercise in time travel, but a test to discover whether computers reprogrammed to eradicate the so-called Y2K bug will be capable of understanding the year 2000. Power plants in Nova Scotia are running on next year's dates. Clocks have been turned ahead at Ontario's hydro plants and transmission stations. At an out-of-service Royal Bank of Canada branch in north Toronto - with papered over windows - and downtown at the skyscraper headquarters of the Toronto Dominion Bank, Y2K testers are making cash withdrawals at banking machines set to dates in the new year. At many such test sites so far, people like Kuhn and Wild have seen the future - and it works. "Everything is coming through without any glitches," Kuhn says. "All the Y2K stuff is working like a charm."
For the "Guide to Y2K," Maclean's canvassed scores of experts and industry and government officials. The consensus is reassuring: Y2K, the computer bug that was considered the portent of blackouts and stuck elevators is now expected to have only a modest effect in Canada. Banks, key government departments, telephone companies and electrical utilities are increasingly confident that most problems have been licked. "The bulk of the work has been done. We've won the technical battle," says Toronto-area consultant Peter de Jager, who is credited with being one of the first to sound the Y2K alarm.
But if Canada - and the United States - appear to be winning on the technical front, there still may be a skirmish or two ahead with the millennium bug. One concern is whether many hospitals can complete repair work in time. Patients are not expected to be put at risk, but there could be delays and minor disruptions. But the biggest fear lies beyond North America. A cascade of computer failures in other countries, especially the Third World, could disrupt international trade. For instance, Japan imports natural gas from Indonesia, which is expected to have major Y2K problems. In Canada, experts fear that people, rather than computers, could be the ones to throw systems out of whack. Nervous citizens might hoard food, prescription drugs and money, and needlessly create shortages.
But what if the experts have called it wrong? What if Canadians wake up to a cold Jan. 1 with no electricity - as many Quebecers and Ontarians did during the 1998 ice storm? If that's the case, then Maj.-Gen. Mike Jeffery will be a very busy fellow. Jeffery, a career soldier who commands the 1st Canadian Division based in Kingston, Ont., has been named commander of Operation Abacus, potentially the largest peacetime deployment in the history of the Canadian Forces. Abacus has a budget of $386 million and a simple aim: to bring out the troops if Y2K problems are so great that the Forces are needed - as was the case with the ice storm, which military planners use as a guide.
Jeffery will command a task force with five regional headquarters across the country. "Everything in principle is available" should he need it, he says, except for soldiers on peacekeeping missions and those involved in sovereignty patrols of Canadian air space and coastal waters. From a makeshift command centre at a federal government training centre in the Ottawa suburbs, the general will watch the new year dawn. But he insists the scope of Abacus is not an indication the military knows something that no one else does. "We are preparing," Jeffery says, "because it is prudent to be prepared."
The hope is that Canadians will feel comforted knowing the troops are at the ready. If provinces ask for help, soldiers could provide radio communications if phones are down, assist police in the event of public panic or looting; or get the elderly to community centres in blackouts. Some, however, believe the huge scope of Abacus will only foster anxiety among Canadians. "It makes them think," says de Jager, "good God, the lunatics are right."
In fact, many experts believe that public fears about possible Y2K failures may become the biggest problem as the new year draws closer. Bankers worry that many people will withdraw extra cash in the closing days of December. (The Bank of Canada is storing old bills and is prepared to print extra cash.) Officials at utilities are concerned about possible power surges if large customers, such as auto plants or mines, switch to backup generators on New Year's Eve without adequate notice. Alex Giosa heads the year 2000 office at Stentor Canadian Network Management, which handles call routing and other services. He warns the phone system could overload if everyone checks for dial tone in the minutes after midnight. "That is our nightmare," Giosa says.
There are also worries about the effects of hoarding, by consumers and companies alike. Dr. Michael Guerriere, executive vice-president of the University Health Network (formerly known as Toronto Hospital) and the person responsible for its Y2K efforts, has no concerns about pharmaceutical supplies - unless people begin to stockpile drugs. "It's one thing to fill a prescription. It's another thing to say I need six months of drugs in my cupboard."
Some anxiety about a breakdown in essential services is being fed, however, by the very people who say privately that they do not expect any problems. The reason is that almost no one is willing to guarantee services will not be interrupted. "No one can give you those kinds of assurances," says Guy Mc Kenzie, head of the federal Treasury Board's year 2000 office. No one can be entirely sure they have not missed something, or that key suppliers will be able to deliver. "There will be glitches," Mc Kenzie says.
Glitches are the mantra of Y2K officials. But what is a glitch? It is usually described as an isolated failure that can quickly be fixed, although the GartnerGroup, a big U.S.-based technology consulting firm, expects that 10 per cent of failures could last three days or longer. What worries people so much about Y2K problems is the possibility of widespread, multiple crashes that can overwhelm the ability to respond, just as a single fire would not tax a big fire department but many at the same time would create problems.
If the world does not come to a grinding halt next year, it doesn't mean Y2K was just the product of a few overactive imaginations. "If companies had taken no action, there would have been some big issues," says Larry Simon, vice-president at the Ernst & Young consulting firm in Toronto and head of its Y2K practice. "Some primary business systems would have failed." In fact, some already have, says Lou Marcoccio, GartnerGroup's Y2K research director. Problems began to crop up in the 1970s as banks tried to work out payment schedules on 25-year mortgages. Some crashes have lasted as long as a week, although Marcoccio declined to identify where failures have occurred.
Companies and governments have spent an astounding amount on Y2K issues. The total worldwide cost will be more than $1.5 trillion, according to GartnerGroup. That's more more than twice the tally for the Vietnam War. In Canada, the total repair bill could be as high as $50 billion, according to the federal government. With 11,000 people involved in fixing Y2K problems, the federal bill alone will reach $2 billion. Canadian banks on average are spending about $150 million each. Phone companies had to check 132,000 pieces of the network, plus 18,000 software packages. The bill came to about $500 million.
There are fears the economy could slow down next year - not because of computer failures, but because Y2K spending and stockpiling will suddenly stop. Last December, the Canadian Imperial Bank of Commerce projected Y2K effects will provide some boost to economic growth this year and cause some contraction next year.
But for some people, no amount of spending and assurance will lessen the expectation of catastrophe. What Guerriere calls hoarding, they call prudence. The Canadian champion of those who believe that the millennium bug is a disaster waiting to happen is Joe Boivin, who left his job as director of the Y2K program at the CIBC to set up the Global Millennium Foundation that he runs out of an east-end Ottawa apartment. He foresees a flood of computer failures in Canada and abroad and advises people to stock up with food, water and cash. "The world is going to see more problems than we've ever seen before," he says.
One who has taken heed of Boivin's warnings is Sheila, a retired woman who wants her last name kept private and will say only that she lives on a farm in central Ontario. She is cheerful and well-spoken, hardly fitting the stereotype of a zealot. After reading an article last year about Y2K, Sheila turned to the Internet for further study. The more she read, the more frightened she became. "I believe this will be a major catastrophe," she says. She and her husband, a retired computer programmer, bought a generator and put aside a year's supply of firewood and fuel. They have cashed out of the stock market and are withdrawing their money from the bank. Hesitantly, she bought a rifle and, while she thinks it will be used mostly for hunting, it may also come in handy as a security backup "for our German shepherd." Sheila understands that her stockpiling could create shortages, "but there's no way around it. You either prepare or face the storm unprepared."
Sheila is very scared, and she is not alone. Earlier this year, an elderly customer walked into a Toronto branch of the Royal Bank and asked to take all his money out - about $100,000. The man was so worried that a Y2K problem would wipe out his balance that he planned to put his money under the mattress. The branch called David Moorcroft, vice-president of public affairs at the Royal, who was able to persuade the man that his funds were secure. Similar assurances were published in the bank's newsletter for seniors. But Moorcroft admits more may need to be done. "The biggest issue is fear," he says.
In response, companies, industry associations and government organizations are considering mass advertising campaigns this fall to reassure Canadians that Y2K does not portend the apocalypse. If such campaigns do not work, says Guerriere, "we could take one of the biggest non-events of the millennium and turn it into a big event." Y2K may prove more bugbear than bug - an anxiety that computers have become our masters.
A BUG IS BORN
In the early days of computing, programmers used two digits to represent a year instead of four - 99 instead of 1999. The goal was to conserve then-expensive computer space. The decision left computer programs and chips unable to distinguish between 2000 and 1900.
Many computer dates fall prey to the Y2K problem - they contain only two digits for the year. But most programmers are not debugging by adding an extra two digits for the century. That would be too expensive and complex. Most are simply rewriting programs that help computers to identify the correct century. Some say this quick fix could lead to future problems.
Y2K ON THE NET
The following federal government addresses offer information to the public:
For Y2K issues at home: http://strategis.ic.gc.ca/SSG/yk04717e.html
A database of Y2K-ready products is found at: - http://vend2000.gc.ca/
Information of interest to business: - http://strategis.ic.gc.ca/SSG/yk04743e.html
The government also provides updates on its own readiness: - http://www.info2000.gc.ca/
Also of interest on the issue of Y2K:
For general information on how to prepare for an emergency, see the Safe Guard site:- http://www.safeguard.ca/expect/english/
IBM's site provides general information and data on its own products. Other computer sellers and software makers, including Compaq and Microsoft, also have sites. See: - http://www.ibm.com/ibm/year2000/
Millennium bug expert Peter de Jager's site - http://www.year2000.com/
Joe Boivin is a leading voice warning of calamity and the need to prepare. His Global Millennium Foundation site: - http://www.globalmf.org/
Ready or Not
It has devoured hundreds of millions of dollars, consumed the work lives of tens of thousands of programmers, spawned an industry of specialists devoted to repairing and testing computer systems, and sparked endless debate about the reliance on technology. But for most Canadians, the issue of the Y2K computer bug boils down to one basic question: will this affect my life? Unfortunately, there is no equally simple answer; there may be glitches and there are no guarantees. Simply put, in the world of Y2K, bigger is better. Smaller companies, smaller municipal governments and smaller hospitals have fewer funds to throw at repair efforts, which involve rewriting programs so they can properly handle dates in the new century, and replacing computer systems that cannot be fixed. In some cases, smaller means further behind.
Yet, with those caveats, most key sectors in Canada expect to be prepared for the clocks to tick over at midnight on Jan. 1, 2000. To assess the state of the race to defuse Y2K, Maclean's surveyed key business and government sectors across the country. Here are the results:
UTILITIES: Despite earlier concerns about Y2K blackouts, it now appears the power will be on. Hans Konow, president of the Canadian Electricity Association, says utilities are making good progress in tackling Y2K problems, at a cost of about $250 million. On average, 80 per cent of computer systems used by utilities have already been fixed and tested and the remaining work will be completed by the end of June. "This is not going to be a crisis," Konow says, and he sees no need for consumers to buy portable generators.
Most utilities have watched clocks successfully roll over to the year 2000 to test their systems, says Francis Bradley, vice-president of the Canadian Electricity Association. Two hydro and two coal-fired plants have done so in Ontario. Nova Scotia Power has also been running clocks in 2000 at all major stations.
Utilities in the industrial heartland of Ontario and Quebec say they are well advanced. Much of the country's electrical infrastructure, including generating plants, long-distance transmission and local distribution, predates computer technology, says Bill Imms, a senior official in the Y2K project office of Ontario Power Generation Inc. (part of the former Ontario Hydro). "As long as Niagara Falls keeps falling over the edge of the cliff," he says, "we have the potential to create power. There's not a lot of technology there." Hydro Quebec also says it should be immune to Y2K.
While hydro plants are largely free of computerized equipment, nuclear plants - in operation in Quebec, Ontario and New Brunswick - are chock-full of them. Kurt Asmis, director of safety evaluation for the Atomic Energy Control Board, the federal nuclear regulator, says the three utilities running nuclear stations have all shown that the country's 14 active reactors can be safely operated - and safely shut down once the year 2000 arrives. The AECB demanded proof by the end of 1998 that reactors would be able to supply power safely and successfully in 2000. "That's been demonstrated," Asmis says.
Despite all the reassurances, one potential risk cited by Edward Yardeni, chief economist for Deutsche Bank Securities in New York City and a leading Y2K critic, is the power grid, which ties North American utilities together in four large interconnections. "A major disturbance within one part will rapidly have an impact throughout the interconnection and has the potential to cascade," Yardeni says. Canadian officials say the grid is built to handle outages, and note that it was unaffected by widespread electrical failures during last year's ice storm in Quebec and eastern Ontario. However, a recent report from the North American Electric Reliability Council, which monitors the continent's electrical supply, did acknowledge that "the strength of the overall system may only be as strong as the weakest link."
Not everyone has faith the power will be on. Portable generators are flying off the shelves - due to uncertainty about both Y2K and the weather.
OIL AND GAS: Almost as important to Canadians in winter is the supply of natural gas and oil products. At TransCanada PipeLines Ltd., which runs the only national gas pipeline, all critical systems will be fixed and tested by the end of June, says spokesman Dave Liderth. The Canadian Gas Association says the industry does not expect any problems. At Petro-Canada, one of the largest Canadian oil companies, "it will be business as usual" as the new year begins, says Brian Brenneman, the company's Y2K project director.
TELEPHONES: Alex Giosa, who heads the Y2K office at Stentor Canadian Network Management in Ottawa, will be watching New Year's unfold from the phone industry "war room" that will be set up in Stentor's Ottawa operations centre. From there, he will have a jump on Y2K's impact because Stentor has arranged an early warning system - it will check in with phone company officials in New Zealand, one of the first countries that will experience the new year. "We will get 18 hours warning," Giosa says. He will also be watching what happens as clock hands pass midnight in Newfoundland's time zone. Stentor will have triple the staff normally on duty, not just for the New Year's rollover, but also when the leap year hits on Feb. 28 and 29. As this is the first leap year opening a new century in 400 years, many systems may fail to recognize the extra day - unless they have been reprogrammed to do so.
Dates do not affect the routing of calls, Giosa says. But the phone system does use them in a mountain of computer programming code - 200 million lines of it - to manage and monitor the network, bill customers and handle calling cards. The Canadian voice network was fixed at the end of 1998. By the end of June, billing systems will be reprogrammed so that someone who starts a call at five minutes to midnight on Dec. 31, 1999, and ends it six minutes later, on Jan. 1, 2000, doesn't get a bill for a 100-year call.
At Bell Mobility, which handles cellular phone calls in Ontario and Quebec and processes bills for the national Mobility Canada network, the company says its Y2K problems will be repaired on time. "We are confident of the ability of our network to process calls," says Dave Lazzarato, a senior vice-president. Rogers Cantel Mobile Communications Inc., which operates a national cellular system, was less forthcoming. "We're somewhat hesitant to comment," says David Robinson, vice-president of investor relations for parent company Rogers Communications Inc. (which also owns Maclean's). However, the company's Web site says 82 per cent of Cantel's Y2K effort is complete.
BANKING AND FINANCE: The big Canadian banks are also setting up year 2000 war rooms at their data centres. Hotel rooms in Toronto and other cities have been booked for the extra staff on duty and senior executives will be staying close to the phones. At the Royal Bank, vice-chairman Gord Feeney will be on call, while chairman John Cleghorn will be ready to make decisions from his cottage in the Eastern Townships of Quebec if there are problems. Computer systems at the banks will be primed to deal with an expected flood of account inquiries as customers check their bank balances before the century changes.
All financial records will be copied to magnetic tape on Dec. 31 as a precaution and extra cash will be available to keep banking machines full, says Frank Riddell, chairman of the Y2K working group of the Canadian Bankers Association and project manager for the Y2K effort at Toronto Dominion Bank. From their perch, TD Bank officials will be watching customer credit-card transactions in parts of the world where New Year's has arrived. They want to see whether the system is working as promised before the rollover hits Canada. Staff will also be sent to some branches on Jan. 1 to make test transactions - and to ensure they can get into the buildings.
Banks get high marks for Y2K preparations from the federal banking regulator, which says more than 90 per cent of institutions met its Dec. 31, 1998, deadline for the repair of so-called mission-critical systems, including banking-machine networks and software used to manage mortgage and customer accounts. Riddell says systems that tie the industry together - including the networks for cheque-clearing, credit-card and debit-card payments - have also been fixed. "But there's still a lot of testing to be done," he says.
The investment industry is also in good shape, having successfully run preliminary tests on its systems last month, checking the ability to make trades and settle orders. A similar test for bond-market trading showed Y2K problems had been fixed, said Randee Pavalow, head of the Y2K committee of the Canadian Securities Administrators.
AIRLINES: The airline industry's biggest Y2K problem may be convincing travellers they can fly without fear during the New Year's period. To bolster confidence, China made news this year by ordering its airline executives to be on flights as the new century begins.
Air Canada, which expects to spend about $40 million on Y2K fixes, including upgrades to navigation computers and systems used for ticketing and other operations, says flying jitters are unwarranted. Boeing, Airbus and Bombardier have all "certified to our satisfaction that they are compliant," says Lise Fournel, the airline's vice-president for information technology. The U.S.-based Air Line Pilots Association, which represents pilots at 51 airlines, including Canadian Airlines, expects nothing scarier than some scheduling delays. "Our impression is that we're not going to have radar screens blink out at one minute after midnight or have planes crash into each other," says spokesman John Mazor.
Safe air travel relies on functioning air traffic control. In Canada, that is the responsibility of Nav Canada, a nonprofit organization. The systems were repaired last year, says David Honkanen, its Y2K project director. Nav Canada is taking part in joint tests with controllers in the United States, Britain, Portugal and Iceland. Honkanen is confident enough about the system that he will be in the air over New Year's, taking a flight to London on Dec. 31.
It's one thing to fly to London, but it may be another to fly to parts of the world where Y2K problems have received less attention. The International Civil Aviation Organization has expressed concern about Russian-made aircraft. Airlines will be deciding later this year which overseas routes are safe, based on information from the International Air Transport Association. IATA spokesman William Gaillard says the association does not expect any major problems. Now, all the industry has to do is persuade its customers to fly.
THE FEDERAL GOVERNMENT: Like most big organizations, the federal government is concentrating attention on what it calls "mission-critical" systems: the things it absolutely has to do, such as pay its employees, provide pension and employment insurance cheques, defend and police the country, and collect taxes. Those systems, says Linda Lizotte-MacPherson, Ottawa's chief information officer, will be ready on time, although there could be some problems that she insists will be repaired quickly.
Yet some insiders say the government is failing to meet its own deadlines. All critical systems were supposed to be fixed and tested by Dec. 31, but only 82 per cent of projects met that goal. And while the government expects to have all systems ready for more thorough testing by June 30, some departments will not be ready until October. Ottawa's latest readiness report for the end of February shows an 88-per-cent success rate. Systems still not repaired include the foreign affairs department's network for communicating with embassies and the Laboratory Centre for Disease Control.
Another important laggard is the defence department, which has the job of coming to the country's aid next year in the event of Y2K failures. The department has only 84 per cent of its work done on its 880 systems - including command and control operations that pass orders and information between headquarters and military bases. Work will not be finished until Sept. 30. That may sound late for a department that is supposed to be ready to help everyone else. But Lt.-Gen. Raymond Henault, deputy chief of the defence staff, says the department will be Y2K-ready, with so-called work-arounds that will allow it to get the job done in other ways if systems cannot be repaired in time.
Government Y2K officials received a sneak preview of what might happen next year when the government began fiscal-year 2000 on April 1. Although information was still being compiled, "so far, it's going smoothly," says Jim Bimson, the head of the departmental readiness branch of the Treasury Board's year 2000 project office.
MUNICIPALITIES: Many key essential services, including water and sewage treatment, fire and police services, are provided by the more than 4,000 cities and towns of Canada. Interviews with Y2K officials in major cities suggest a high degree of confidence that computer programs will be repaired in time. Police, fire, 911 and ambulance systems are either ready or will be soon.
But there are concerns, says Al Aubry, general manager of year 2000 services at IBM Canada Ltd., that some municipalities, particularly smaller ones, are behind in the race. Yet James Knight, executive director of the Federation of Canadian Municipalities, says his discussions with officials across the country, as well as internal surveys, have convinced him that essential services will be provided without any serious interruptions at the start of next year. "They will be there," Knight told Maclean's. If there are problems, he says, they will most likely affect the municipal administrations, not the services they provide. For instance, water and sewage treatment plants can be run manually. Traffic lights, Knight says, turn red if their computerized controls fail - a prescription for tie-ups, but hardly the problem there would be if they shut down.
In eight provinces, the RCMP provides local policing. The Mounties have completed more than 90 per cent of their Y2K work, with some minor reprogramming to be finished by April 30. As a precaution, the RCMP has cancelled all leaves from Dec. 27 until March 15, 2000, and other forces have similar plans, although Toronto police Chief David Boothby says he does not expect an increase in crime. "It's better to be prepared and nothing happens," Boothby says, "than not be prepared and something happens."
As in other provinces, the Ontario government is making sure every municipality has its own emergency plan, says Doug Harrison, deputy director of Emergency Measures Ontario. While some towns and cities - which Harrison declined to name - had been doing no contingency planning, now "every municipality is starting to work."
But there is little time to spare. The question remains whether every hamlet, hospital and government in this country can have all systems ready for the clocks to strike midnight on Jan. 1.
Maclean's April 19, 1999