April 19, 1999
Cover

Guide to Y2K

Canada seems to be winning the battle of the year 2000 bug. But that may not ease the high anxiety

BY WARREN CARAGATA

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 (page 38). 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 (page 44). 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.

THE FIX

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.