This policy comes into effect on June 1, 2002.
This policy encompasses modern and consistent direction and guidance for departments and agencies in managing their
executive vehicles. It consolidates and supersedes previous Treasury Board direction on executive vehicles into one
document.
The objective of this policy is to ensure that there is economy, environmental consideration, equity, and probity
in the management of the executive vehicle fleet, while meeting the needs of authorized users.
It is government policy
- that vehicles for ministers, ministers of state, secretaries of
state, deputy ministers of the Crown, and eligible senior officials be acquired first and foremost for conducting
government business;
- that ministers, ministers of state, secretaries of state, deputy
ministers of the Crown, and eligible senior officials be allowed to make personal use of the vehicles assigned to them
when these vehicles are not required for official use.
5.1 This policy applies to departments and agencies listed in Schedules I, I.1, and II of the Financial
Administration Act. It does not apply to Crown corporations.
5.2 This policy supersedes all of the following documents:
- Circulars 1978-16, 1985-2 and 1987-34, as amended
- TB decision letter 772116 of September 4, 1980
- TB decision letter 816305 of May 16, 1991
- TB decision letter 824435 of August 6, 1996
- TBS letter dated December 11, 1997, entitled Executive Vehicle
Policy
6.1.1 Authorized users consist of Cabinet ministers, ministers of state, secretaries of state, deputy ministers of
the Crown, and eligible senior officials.
6.1.2 Eligible senior officials are those who meet all of the following criteria:
- he or she must hold a full-time position as a deputy minister,
must be appointed at a level equivalent to a DM-2 or above, or is appointed at a salary that exceeds these levels;
- he or she must be a deputy head; and
- he or she must occupy the most senior position in the
organization.
6.1.3 The Management Priorities and Senior Personnel Secretariat (MPSPS) of the Privy Council Office will maintain
a current list of all senior officials who are eligible to make personal use of an executive vehicle. The MPSPS will
inform officials who become eligible or who are no longer eligible to make personal use of an executive vehicle.
Reassignment to a position or to a status that no longer meets the eligibility criteria results in the immediate loss
of privileges to use the executive vehicle for personal purposes.
6.1.4 Exceptions to the eligibility criteria must be approved by Treasury Board or the Governor in Council.
6.2.1 The formula established by the Treasury Board for the calculation of the authorized maximum price or lease
cost for executive vehicles for deputy ministers of the Crown and eligible senior officials is based on the Consumer
Price Index produced by Statistics Canada. The authorized maximum price or lease cost for executive vehicles for
ministers, ministers of state, and secretaries of state is determined by using the formula for deputy ministers and
eligible senior officials and adding 20 per cent.
6.2.2 These limits will be adjusted annually in July using the Purchase of Automotive Vehicle Index in the Consumer
Price Index for the month of May. The annual adjustment is determined by the Treasury Board of Canada Secretariat (the
Secretariat) and communicated via letter to the procurement authority at Public Works and Government Services Canada
(PWGSC) and to the MPSPS of the Privy Council Office.
6.2.3 For the purchase of executive vehicles, the limits apply to the actual price paid for the vehicles, including
accessories, preparation and delivery charges, Goods and Services Tax (GST) or Harmonized Sales Tax (HST), and all
other applicable taxes and levies. Limits do not apply to the cost differential paid for alternative fuel equipment
(including electricity on hybrids) for new vehicles. If a vehicle is leased, the price that would have been paid for
the purchase of the vehicle must be within the same limits.
6.2.4 The authorized maximum price must include all optional equipment and accessories that are available from the
manufacturer, even if these are acquired in the aftermarket. Equipment and accessories installed in executive vehicles
for reasons of security and efficient government business such as telephones, alarm or security systems, and reading
lamps are not included when calculating the authorized maximum price.
6.2.5 Notwithstanding the limits set out in
6.2.1 above, for any given year the limits will be reduced by 15 per cent for any vehicle purchased to replace a
vehicle that is not at least three years old or that has not travelled more than 150,000 km. The three-year period
starts from the date on which the executive vehicle is accepted from the delivering dealer. Departments will inform
the PWGSC contracting authority of the acceptance date.
6.2.6 Limits will be reduced by 15 per cent in
cases where the replacement vehicle selected costs more than the lowest quoted price received by PWGSC for the
requested vehicle equipment and model, and using the same procurement method.
6.2.7 The limit reduction will not apply if the selected replacement vehicle is replacing a vehicle equipped with a
regular 6 or 8-cylinder engine that runs on conventional fuel (even if the vehicle being replaced is not at least
three years old or has not yet traveled more than 150,000 km).
6.2.8 Exceptions to the authorized maximum price must be approved by the Treasury Board.
6.3.1 The type, size, and quality of executive vehicles purchased or leased should be comparable, in general, to
that of vehicles purchased or leased in the private sector for similar use. Those purchasing or leasing such vehicles
must act with probity and exercise prudence in the acquisition and use of government property.
6.3.2 Executive vehicles must provide adequate and cost-effective transportation for official purposes, while
meeting some of the user's personal preferences and needs. These vehicles should be, above all, highly reliable, safe
and secure for the users.
6.3.3 Executive vehicles will be
- hybrid-electric, if
available from the manufacturers;
- factory-equipped for
natural gas, propane, or E-85 ethanol fuel, if available from the manufacturers, where fuelling infrastructure exists
or is planned; or
- factory-equipped with
a 4-cylinder conventional fuel engine (gasoline or diesel) that emits below 4200 kg of C02 emissions per
year as outlined in the Fuel Consumption Guide published by Natural Resources Canada.
Vehicle classes are to be consistent with those contained in the Government Motor Vehicle Ordering Guide
published by Public Works and Government Services Canada.
6.3.4 An executive vehicle must meet executive business requirements and it must fall within one of the following
categories: intermediate or smaller four-door sedan or station wagon, or mini-van. Other categories of vehicles
will be considered if they meet the requirements of 6.2 and 6.3.3 (a) or (b) above.
6.3.5 Exceptions to the executive vehicle standards must be approved by the Treasury Board.
6.4.1 PWGSC has the exclusive responsibility of acquiring executive vehicles. All transactions for executive
vehicles will be concluded by PWGSC headquarters and departments must refrain from discussing any terms of acquisition
with dealers.
6.4.2 PWGSC will ascertain the eligibility of the official for whom an executive vehicle or insurance coverage is
requisitioned, and verify the vehicle's conformity with the executive vehicle standards as defined above.
6.4.3 In order to support the government's objective to green its operations, departments must take action to
initiate the replacement of conventional fuel powered vehicles when they reach the three-year period or have travelled
150,000 km. Departments may opt to use life-cycle costing principles to determine when to replace hybrid and
alternative fuel vehicles.
6.4.4 Executive vehicles
must be purchased through PWGSC headquarters at the best available price and in accordance with the procurement
practices stipulated in the Motor Vehicle Policy and the Alternative Fuels Act. Trading in vehicles and
purchasing used vehicles are prohibited practices, as they are not cost-effective for the federal government.
6.4.5 Executive vehicles acquired through dealer stock are generally more expensive than those acquired through
PWGSC's Departmental Individual Standing Offers. They are to be avoided whenever possible. Requests for dealer stock
purchases will be processed in accordance with the requirements of the Motor Vehicle Policy.
6.4.6 When emergencies occur or delays are expected regarding the delivery of a new vehicle, consideration should
be given first to extending the use of the vehicle being replaced, then to using another departmental vehicle, or, as
a last resort, using a rental vehicle until the ordered vehicle is delivered by the manufacturer.
6.4.7 Departments are to consider the environmental effects of acquisition, use, and maintenance of executive
vehicles. The Motor Vehicle Policy contains a Green Fleet Management Checklist to assist departments in
ensuring that they manage their fleet in an environmentally responsible manner.
6.4.8 E-10 fuel will be used whenever available in all executive vehicles equipped with engines that operate on
regular gasoline. E-10 is a blend of 90 per cent gasoline and 10 per cent ethanol.
6.4.9. Vehicles equipped to operate on E-85 ethanol should use this fuel whenever available. If E-85 ethanol is not
available, these same vehicles can operate on E-10 and, as such, will use it whenever available.
6.5.1 Notwithstanding the normal government practice to "self-underwrite" government vehicles, all motor
vehicles provided to ministers, ministers of state, secretaries of state, deputy ministers of the Crown, and eligible
senior officials must be fully insured commercially with coverage for official and personal use. Proper insurance
coverage will be arranged through PWGSC.
6.5.2 As a minimum, the insurance policy must include public liability, property damage, collision and
comprehensive coverage, as determined to be appropriate by PWGSC. Guidelines contained in the appendix include
proposed minimum coverage.
6.5.3 PWGSC will pay for the insurance coverage at the beginning of the coverage period and will be reimbursed
accordingly by the appropriate departments and agencies at the end of the coverage period. Departments and agencies
are responsible for the cost of deductibles on the insurance policy.
6.6.1 Departments are required to assign a credit card to each vehicle for tracking fuel usage as well as
maintenance and repair costs, and for maintaining consolidated monthly billing.
6.6.2 Only the vehicle-specific fleet credit card assigned to the executive vehicle should be used for all fuel
purchases, repairs, and maintenance of the vehicle.
6.6.3 The 1-800 number on the card should be used to reach professional assistance before any work is authorized on
the vehicle. This will ensure that the proposed work is required and properly recorded in the vehicle maintenance
system, that it is not covered under manufacturers' warranties, and that the best value is received from the repair
facility. In unusual circumstances where work is not recorded using the credit card, it should be reported by
telephone to the 1-800 number at the earliest possible date. Vehicles identified in the card issuer's vehicle
maintenance system as those of a minister, minister of state, secretary of state, deputy minister of the Crown, or
eligible senior official will be given priority treatment when the repair facility uses the 1-800 line to have the
repairs or maintenance authorized.
Executive vehicles must be disposed of in accordance with the policy on the Disposal of Surplus Moveable Crown
Assets.
6.8.1 Ministers, ministers of state, secretaries of state, deputy ministers of the Crown, and eligible senior
officials are permitted to make personal use of executive vehicles provided by their departments or agencies. For the
purposes of the Income Tax Act, however, any use of a ministerial vehicle for anything other than official use
generally constitutes a taxable benefit.
6.8.2 The executive vehicle is also available to persons related to the individual for personal use, provided that
the vehicle is not required for official use and it is commercially insured for official and personal use.
6.9.1 The personal use of a vehicle, as defined by the Canada Customs and Revenue Agency (CCRA), constitutes a
taxable benefit and must be reported as income to CCRA.
6.9.2 Users of executive vehicles who elect to make personal use of the vehicle must report this choice to their
department. The individual assigned the vehicle is then personally responsible under the Income Tax Act for
keeping records and reporting to the department on the amount of personal use so that the taxable benefit can be
determined and reported as remuneration for income tax purposes.
6.9.3 Departments are responsible for recording the distance driven, in kilometers, for personal use as reported by
users, for calculating the amount of the taxable benefit, and for reporting the value to be recorded in the
remuneration system.
Executive vehicles will not bear external identification markings such as those identified in Section 3.1 of
the Federal Identity Program.
7.1 PWGSC headquarters is responsible for the procurement of all executive vehicles, for ensuring compliance with
applicable Treasury Board policies, and for maintaining commercial insurance contracts with private-sector insurers
for the executive fleet.
7.2 PWGSC is accountable for the enforcement of the executive vehicle standards and limits set out in this policy
and for limiting the insurance coverage to vehicles assigned to eligible persons. PWGSC will implement specific
administrative measures to prevent inadvertent deviations from certain provisions of this policy and to ensure strict
application of the relevant executive vehicle standards.
7.3 The Privy Council Office (PCO) is responsible for maintaining the list of Governor in Council appointees who
are eligible to use an executive vehicle. PCO will provide an Eligibility List for Executive Vehicles to the
Secretariat and PWGSC on a quarterly basis.
7.4 According to the Income Tax Act, the minister, minister of state, secretary of state, deputy minister of
the Crown, or eligible senior official to whom a vehicle has been made available for personal use receives a taxable
benefit and is responsible for keeping records of personal use and ensuring that the combined kilometrage for official
and personal use matches the total kilometrage for the vehicle.
7.5 The Secretariat, on behalf of the Treasury Board, provides leadership and co-ordination in ensuring that
executive vehicles are managed in a manner consistent with this policy. The Secretariat also develops related policies
and monitors the application of these policies.
8.1 The Secretariat will assess the effectiveness of this policy, determine how it is applied in departments and
whether or not it needs to be revised. The Secretariat will do this through ongoing contact and committee work with
departments, including consultation with the Fleet Management Committee. This policy will be reviewed within three
years from the date of issuance.
9.1 This policy is issued under the authority of section 7 of the Financial Administration Act.
9.2 All departments that require executive vehicles should consult the documents listed below.
From Canada Customs and Revenue Agency:
- Interpretation Bulletin IT-63R5: Benefits, including Standby
Charge for an Automobile, from the Personal Use of a Motor Vehicle Supplied by an Employer and subsequent revised
editions of this document
- Employers' Guide T4130 on Taxable Benefits, Chapter 1,
"Automobile Benefits and Allowances"
From Treasury Board of Canada Secretariat:
- Motor Vehicle Policy, including the application of the Alternative
Fuels Act
- Materiel Management Policy
- Policy on the Disposal of Surplus Moveable Crown Assets
From departments and agencies:
- Guidelines for Ministers' Offices
Please direct all inquiries about this policy to
Senior Policy Analyst
Real Property and Materiel Policy Division
Assets and Acquired Services Directorate
Treasury Board of Canada Secretariat
Telephone Number: (613) 957-2524
Facsimile Number: (613) 957-2405
These guidelines are provided to assist government departments in acquiring, managing and operating their executive
vehicles, as well as monitoring their use, reporting on the taxable benefits, and disposing of them.
2.1(a) Public Works and Government Services Canada (PWGSC) is responsible for the acquisition of executive vehicles
and the purchase and administration of the contract for insurance coverage on them. PWGSC has been given the task of
implementing specific administrative measures to prevent inadvertent deviations from certain provisions of the policy
and to ensure that there is strict application of the relevant standards for executive vehicles. PWGSC also ensures
that requisitions for executive vehicles are processed only when the vehicles meet the applicable standards and when
the intended users are authorized to have them.
2.1(b) Requisitions for vehicles that deviate from the executive vehicle standards will be returned to the
requesting department, unless agreement can be reached to modify details of the requisition to meet the standards.
2.2 Executive vehicles are purchased by PWGSC headquarters in accordance with established procurement policies and
fall within one of the following categories: intermediate or smaller four-door sedan or station wagon, or mini-van.
Other categories of vehicles such as intermediate or smaller utility trucks will be considered only if they meet the
requirements of 6.2 and 6.3.3 (a) or (b) above. Specifications for size, quality, and type of motor vehicle
considered adequate to meet government business requirements have been developed. Departments should consult with
PWGSC headquarters before making any decision on the type of executive vehicle requested.
2.3(a) PWGSC is responsible for ascertaining the eligibility of officials for whom vehicle or insurance coverage is
requisitioned and to verify conformity of vehicles to the standards before it processes requisitions for an executive
vehicle or insurance coverage. In order for PWGSC to carry out this responsibility adequately, all requisitions for
executive vehicles are to be routed only to PWGSC headquarters.
2.3(b) Requisitions for vehicles or insurance coverage for the benefit of an unauthorized official will be returned
to the department with a copy of the applicable extract of this policy.
2.4 The Departmental Individual Standing Offers awarded by PWGSC are generally the most cost-effective procurement
methods with respect to vehicles. Vehicles acquired through dealer stock are generally the most expensive and are to
be avoided whenever possible. If a dealer stock purchase is requested, the requisition must be sent to PWGSC
headquarters along with justification for this type of purchase. If PWGSC cannot obtain the requested vehicle through
the most cost-effective procurement method, the dealer stock justification will be referred to Treasury Board of
Canada Secretariat (the Secretariat) for a ruling, which is normally provided within two working days. If the
justification is approved by the Secretariat, PWGSC headquarters will purchase the vehicle from a dealership.
3.1(a) The Vehicle and Industrial Products Division of PWGSC publishes a list (usually twice a year) of executive
vehicles that can be ordered for ministers, ministers of state, secretaries of state, deputy ministers of the Crown,
and eligible senior officials through standing offer agreements with the automotive manufacturers. All vehicles
contained in this list meet the executive vehicle standards defined in section 6.3 of the Executive Vehicle Policy,
and their prices are within the limits established by the Secretariat at the time they are published.
3.1(b) In order to qualify for the list referred in section 3.1(a) above, vehicles must meet one of the
requirements contained in section 6.3.3 of the Executive Vehicle Policy. The Treasury Board of Canada
Secretariat will determine what vehicles meet the requirements and will provide PWGSC with the make, model. and engine
size of qualified executive vehicles, as needed. PWGSC will use this information to prepare the list prescribed in
3.1(a) above. Factors used to qualify vehicles are based on the vehicle classes contained in the Government Motor
Vehicle Ordering Guide published by PWGSC.
3.1(c) Copies of this list can be obtained by contacting the Vehicle and Industrial Products Division of PWGSC.
Officials may select the appropriate vehicles from this list and prepare the corresponding requisitions to be sent to
PWGSC headquarters.
3.2(a) Those requisitioning executive vehicles should allow 90 to 120 days from the start of the procurement
process at PWGSC until delivery, plus any additional time required by the ordering department to process a
requisition.
3.2(b) Departmental officials should contact the Vehicle and Industrial Products Division of PWGSC prior to
preparing a requisition for an executive vehicle in order to confirm the availability of the required vehicle.
3.2(c) The production cycle of automobiles generally starts in September, and it is common for auto manufacturers
to stop taking orders for the current year's model in March or April. Therefore, any planning for the acquisition of a
new executive vehicle should be in line with the normal production cycle. If a requisition for an executive vehicle is
sent to PWGSC in June, more than likely there will be a longer wait than what is indicated in 3.2(a) for the delivery
of the vehicle.
4.1(a) All costs related to operating and maintaining an executive vehicle shall be borne by the department that
owns or leases the vehicle.
4.1(b) Fines for traffic violations, including unlawful parking, are the responsibility of the user, and will not
be paid with department or agency funds.
4.2(a) To maintain accurate data on fuel use and maintenance, departments are to assign a fleet credit card to an
executive vehicle to capture transactions related to that vehicle. The card should not be used for purchases for other
vehicles or equipment. Emergency transactions not paid by the fleet credit card should be reported to the appropriate
authority for manual entry into the fleet management database.
4.2(b) A National Master Standing Offer for Fleet Card and Fleet Management Services is issued by PWGSC. The use of
this card allows departments to benefit from the government tax-exempt status and from volume discounts obtained
through PWGSC standing offer agreements with major fuel suppliers, tire and tube manufacturers, vehicle dealers, parts
distributors, and other fleet-related service providers.
4.3 Information on alternative fuels and E-10 fuels, including the locations of refuelling stations across Canada,
can be obtained by contacting the Federal Vehicles Initiative Program at Natural Resources Canada.
5.1 Personal use of a government vehicle exposes the user to the risk of high financial liabilities for damages
caused by the vehicle and its driver, or for harm done to the vehicle or its occupants. It is therefore a provision of
the Executive Vehicle Policy that departments insure executive vehicles adequately. The insurance policy should
include the following coverage, as determined appropriate by PWGSC:
- coverage of at least $2 million for public liability and property
damage;
- coverage for collision, with a minimum deductible of $500; and
- comprehensive coverage, with a minimum deductible of $100.
5.2 To ensure that departments and agencies meet this obligation, they shall provide, as a minimum, the following
information to the appropriate PWGSC authority for each executive vehicle to be insured:
- owner (department or agency);
- year, make, and model of vehicle to be insured;
- vehicle identification number (VIN);
- registration identification number (RIN), where applicable;
- driver information (including occasional drivers):
- names of principal drivers;
- names of secondary drivers;
- addresses of drivers; and
- drivers' license numbers and province(s) of issue.
Note
No information is required for a driver who will use the vehicle only once or twice per year.
5.3(a) PWGSC is responsible for securing commercial insurance coverage for the fleet of executive vehicles. It will
pay the insurance company at the beginning of the insurance coverage period and will invoice the department or agency
for coverage of the particular vehicles at the end of the coverage period.
5.3(b) Information on pertinent insurance coverage can be obtained by contacting the Vehicle and Industrial
Products Division of PWGSC.
6.1 Executive vehicles equipped with regular engines that run on conventional fuel shall be replaced once they have
reached three years in accordance with section 6.4. The replacement of hybrid and alternative fuel vehicles can
be based on life cycle costing measures, taking into consideration all relevant factors.
6.2 Transferring an executive vehicle to the departmental fleet is permitted when justified. The conditions
outlined in section 6.2.5, however, must still be met (that is, the vehicle being replaced must not be less than three
years old or have been driven less than 150,000 km); otherwise the price limit will be reduced by 15 per cent on the
acquisition of the replacement vehicle.
6.3 Departments and agencies shall dispose of executive vehicles in accordance with the policy on the Disposal
of Surplus Moveable Crown Assets, and do so, in general, using the standing offers issued by PWGSC for vehicle
remarketing or disposal. Departmental fleet managers are familiar with these standing offers and should be involved in
the disposal of executive vehicles.
7.1 A minister, minister of state, secretary of state, deputy minister of the Crown, or eligible senior official
may request that the executive vehicle provided for his or her official government use also be available for his or
her personal use. Personal use includes any use that is not official. A definition of "personal driving" is
provided in Chapter 1, "Automobile Benefits and Allowances," of the Employer's Guide T4130 on Taxable
Benefits published by CCRA.
7.2 Any personal use, including travel between a regular place of work and a residence, constitutes a taxable
benefit and is to be included as remuneration for income tax purposes. Failure to do so exposes the recipient of the
benefit to the penalties set out in the Income Tax Act. The administration of this benefit requires detailed
records. To this end, the following administrative arrangements apply:
- Because Treasury Board, the employer, is responsible for
maintaining detailed records on individual vehicles, it requires departments and agencies to report essential data on
executive vehicle costs and usage by using a private-sector fleet-management information system and the companion
credit card. This procedure applies to all executive vehicles, notwithstanding any exemption granted to departments
that operate their own information systems. Any proposed exceptions must be assessed and approved by the Secretariat
and, as appropriate, by the Treasury Board. (This procedure also enables the Secretariat to take a life‑cycle
management approach to monitoring the cost of maintaining, repairing, and operating vehicles.)
- Calculation of the taxable benefit and completion of T-4 forms
(and RL-1 slips for Quebec income tax) must conform to the requirements of the Income Tax Act and of its
Regulations. Interpretation Bulletin IT-63R5 and its subsequent revised editions, available from CCRA, are
particularly relevant. For provincial income taxes, as required, relevant acts, regulations, and instructions should
be consulted. Properly and accurately reporting income, however, remains the responsibility of the individual.
- It is strongly recommended that departments and agencies refer to
the Employer's Guide on Taxable Benefits published by CCRA. Chapter 1, "Automobile Benefits and
Allowances," contains a worksheet for calculating automobile benefits.
7.3 If the contents of this policy or related directives contradict the provisions of the Income Tax Act,
the regulations made pursuant to the Act, or other directives issued by the pertinent authorities, the provisions of
the latter take precedent over this policy for internal administrative directives.
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