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INTERNATIONAL ASPECTS

The Year 2000 problem is global although the impact is greatest in highly industrial nations, some of which are well advanced in their Year 2000 preparation. Canada, the United States, the United Kingdom, the Netherlands, Sweden and Australia are amongst the leaders. How each nation handles the issue could affect the international community in a number of ways.

As a trading nation, Canada is dependent on its trading partners for providing necessary imports and purchasing exports. If our trading partners are not Year 2000 ready then, even if Canada were fully Year 2000 compliant, our economy would be threatened. A clear assessment of the potential risks to international trade and the threat to Canadian exporters associated with the Year 2000 problem would permit Canadian industry to make the essential adjustments, such as seeking new suppliers, stockpiling key items, and reducing export inventories and production. Other international risks related to how well countries handle the Year 2000 problem include those to Canadian travellers and Canadian residents abroad, those to international security and those to Canadian missions abroad.

As a result of these potential international risks, the federal government has assigned the Department of Foreign Affairs and International Trade (DFAIT) the task of assessing the international Year 2000 situation. DFAIT informed the Committee that it had established a dedicated unit and prepared an action plan for the five areas of risk. The four phases of its plan are:

• Phase one, consisting of planning and scoping the overall study on the international Year 2000 risks.
• Phase two, which has already begun, involving the identification of the most significant potential risks. This will involve more detailed country risk analysis, trade flow and capital flow analysis.
• Phase three, which will be carried out between February and June 1999, involving the detailed investigation of the Year 2000 compliance status of each of the potential risks identified in phase two.
• Phase four, which will take place between July and December 1999, involving the negotiation and implementation of a contingency plan. It is during this phase that Canadian businesses will receive information on possible problems related to international trade.

DFAIT is also taking measures to assist Canadians abroad. Canada, the United States, the United Kingdom, New Zealand and Australia will work co-operatively to help their citizens in other countries. Canadian missions are being strengthened and contingency plans to ensure continued operations are to be completed by July 1999. As well, Canadian Consuls are to advise other countries of the Year 2000 problem and promote awareness.

On a more humanitarian front, many developing nations lack both the resources and expertise to overcome their Year 2000 problem. In many of these nations, however, the scope and magnitude of the problem is much more restricted. Some of the international assistance already being offered by Canada could potentially worsen the problems in these nations. According to the Canadian International Development Agency's (CIDA) assessment of its projects, 2 of its 391 bilateral projects were classified as high risk (potential loss of life) and 39 as medium risk. CIDA is working to ensure that these problems are corrected. It is also looking at other actions aimed specifically at aiding developing nations to meet the Year 2000 challenge, such as funding to fix the Year 2000 problems at airports in some developing nations, a problem mentioned by the air transport industry.