Rescinded [2006-11-01] - Executive Vehicle Policy

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Note to reader

Notice to the reader: As of November 1st 2006, this document is no longer in effect. It has been archived online and is kept purely for historical purposes. New Assets and Acquired Services Policy Instruments are now in effect.

1. Effective Date

This policy comes into effect on June 1, 2002.

2. Preface

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.

3. Policy Objective

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.

4. Policy Statement

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. Application

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. Policy Requirements

6.1 Authorized Users

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 Authorized Maximum Price

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 Standards for Executive Vehicles

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

  1. hybrid-electric, if available from the manufacturers;
  2. factory-equipped for natural gas, propane, or E-85 ethanol fuel, if available from the manufacturers, where fuelling infrastructure exists or is planned; or
  3. 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 Acquisition and Use

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 Insurance

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 Fleet Credit Cards

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.

6.7 Disposal

Executive vehicles must be disposed of in accordance with the policy on the Disposal of Surplus Moveable Crown Assets.

6.8 Personal Use

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 Taxable Benefits

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.

6.10 Federal Identity Program Markings

Executive vehicles will not bear external identification markings such as those identified in Section 3.1 of the Federal Identity Program.

7. Responsibilities

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. Monitoring

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. References

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

10. Inquiries

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

Appendix – Guidelines

1. Introduction

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. Administrative Measures

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. Procurement Process

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. Fleet Management

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. Insurance

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.


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. Replacement and Disposal

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. Personal Use and Taxable Benefit

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.