Guide to Fleet Management, Chapter 2: Executive Vehicles

2009

Table of Contents

1. Introduction

1.1 Purpose

Chapter 2 of the Guide to Fleet Management is intended to assist directors and managers in implementing the government's policy and directives related to the management of executive vehicles.

Organized around a life-cycle approach that takes into consideration the environmental impact of executive vehicles, this chapter provides guidelines and best practices that complement the mandatory direction provided in the Directive on Fleet Management: Executive Vehicles. In some cases, this guide also details procedures from other Treasury Board directives. This enables directors and managers to adhere to a common set of procedures and to ensure their decision making and management practices are consistent with the full range of best practices and guidelines relevant to the management of executive vehicles.

1.2 Scope

Whereas the government's fleet of executive vehicles represents a high-profile capital and ongoing operational and maintenance expense to the government, it is critical that departments manage and operate these vehicles according to a common set of mandatory requirements. It is also important that they consider a wide range of guidelines and recommended practices.

These guidelines and good practices are provided to assist departments in acquiring, managing, operating, and disposing of their executive vehicles; monitoring their use; and reporting on the taxable benefits. These guidelines should be read in conjunction with the Guide to Fleet Management, Chapter 1: Light-Duty Vehicles, which contains guidelines and best practices related to the life-cycle management of all light-duty vehicles, including executive vehicles.

Departments should consult the Treasury Board of Canada Secretariat's (Secretariat) Materiel Management website for direction and guidance on materiel and fleet management, and for links to websites of interest to materiel managers.

1.3 Chapter organization

Chapter 2 of the Guide to Fleet Management specifically addresses the life-cycle management of executive vehicles. Similar to Chapter 1, it is organized into sections consistent with the four phases of the life cycle of materiel: planning, acquisition, operation (use and maintenance), and disposal. Additional sub-headings are used to distinguish subject matter clearly, where applicable. The sections of this chapter are as follows:

  • Section 2 discusses roles and responsibilities, including general administrative measures from the perspective of Public Works and Government Services Canada (PWGSC);
  • Section 3 provides general guidelines on planning requirements;
  • Section 4 sets out guidelines for the acquisition of executive vehicles;
  • Section 5 provides guidelines for the operation, use, and maintenance of executive vehicles;
  • Section 6 lays out guidelines for the insurance of executive vehicles;
  • Section 7 provides guidelines for the replacement and disposal of executive vehicles; and
  • Section 8 discusses personal use and taxable benefits related to the use of executive vehicles.

2. Roles and Responsibilities

2.1 Federal departments

For the purposes of this chapter, federal departments include all organizations under schedules I, I.1, and II of the Financial Administration Act.

Departments are essentially responsible for the funding and management of all life-cycle phases of their executive vehicles; however, they are guided by policy direction provided by the Secretariat. Most departments have an established internal policy related to the ownership, use, maintenance, and disposal of light-duty fleets, including executive vehicles. Other departments may refer to the applicable Treasury Board policies, directives, regulations, and guidelines.

Additional details on the roles and responsibilities of departments related to executive vehicles can be found in the Policy on Management of Materiel and the Policies and Guidelines for Ministers' Offices.

2.2 Public Works and Government Services Canada

PWGSC is responsible for the acquisition of executive vehicles and the purchase and administration of their insurance coverage contracts. PWGSC implements specific administrative measures to prevent deviations from certain provisions of the policy and to ensure 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.

Requisitions that deviate from the applicable standards will be returned to the requesting department unless agreement can be reached to modify the details of the requisition to meet the standards.

Executive vehicles are purchased by PWGSC headquarters in accordance with procurement policies. The Directive on Fleet Management: Executive Vehicles requires that these vehicles fall within one of the following categories: four-door sedan, station wagon, or minivan. Other categories may be considered if they are hybrids or alternative fuel vehicles. Specifications for size, quality, and type of motor vehicle considered adequate to meet government business requirements have been developed.

Note: Departments should consult with PWGSC headquarters before making any decision on the type of executive vehicle requested.

PWGSC is responsible for ascertaining the eligibility of officials, for whom a vehicle or an insurance coverage is requisitioned and verifying the conformity of a vehicle to the applicable standards before it processes a requisition. In order for PWGSC to carry out this responsibility adequately, all requisitions for executive vehicles are to be routed to PWGSC headquarters.

Requisitions for vehicles or insurance coverage for unauthorized officials will be returned to the requesting department along with a copy of the applicable extract from the Directive on Fleet Management: Executive Vehicles.

2.3 Privy Council Office

The Senior Personnel Secretariat of the Privy Council Office is responsible for maintaining the list of Government in Council appointees eligible to use an executive vehicle and for providing this Executive Vehicle Eligibility List to the Secretariat and PWGSC on a quarterly basis. Eligible senior officials are those:

  • who hold a full-time position as a deputy minister with a personal classification equivalent to the DM 2 level (GC 9-10 or GCQ 9-10) or above;
  • who are deputy heads; and
  • who occupy the most senior position in the organization.

The Senior Personnel Secretariat is responsible for informing 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.

2.4 Treasury Board of Canada Secretariat

The Secretariat, on behalf of the Treasury Board, provides leadership and coordination in ensuring that executive vehicles are managed consistently with the Directive on Fleet Management: Executive Vehicles. The Secretariat also develops and monitors the application of related policies and guidelines.

3. Planning

3.1 Understanding procurement timelines

To effectively manage transportation, it is essential that departments understand the automotive manufacturer's production cycle in relation to the departmental individual standing offers (DISO) for light-duty vehicle acquisitions. It is also important that departments consider the delivery turnaround time when ordering an executive vehicle.

Objective:

To ensure that departments understand the potential length of time between ordering an executive vehicle and receiving it.

Good practices:

  • Allow sufficient time for delivery when ordering an executive vehicle. In general, PWGSC standing offers allow a turnaround of 90 to 120 days for production and delivery of light-duty vehicles, including executive vehicles. The turnaround time allowed for alternative fuel vehicles is estimated to be between 120 and 150 days.
  • Determine the optimal time of the year to order an executive vehicle. The Guide to Fleet Management, Chapter 1: Light-Duty Vehicles provides departments with the projected automotive manufacturers' production cycle in relation to the procurement of motor vehicles using the existing DISOs for light-duty vehicle acquisitions. In general, the production cycle begins in September in conjunction with the awarding of the DISOs.

3.2 Selecting vehicle class and type

When selecting a vehicle class to meet operational requirements, the Directive on Fleet Management: Light Duty Vehicles requires that departments consider a smaller class vehicle that has benefited from current technology.

Objective:

To ensure that executive vehicles, while meeting the needs of authorized users, are managed with economy, equity, and probity, and in consideration of their effect on the environment.

Good practices:

  • Consider selecting the smallest practical vehicle class by evaluating the regular transportation requirements. Vehicle size should not be based on occasional requirements (such as towing and four-wheel drive capability or carrying additional passengers), which may be more cost effectively met by using alternative transportation modes.
  • Assess whether a smaller vehicle or engine can meet the transportation requirements previously or currently met by a larger vehicle. For example, a newer model compact sedan with a smaller but more efficient engine may satisfy the transportation requirements previously met using a mid-sized sedan with a larger engine.

4. Acquisition

4.1 Qualifying an executive vehicle

PWGSC publishes an Executive Vehicle Listing (usually twice a year) of vehicles that can be ordered for ministers, ministers of state, secretaries of state, deputy ministers, and eligible senior officials through the DISOs. These vehicles are awarded by PWGSC to the automotive manufacturers. All vehicles on this list meet the executive vehicle standards defined in section 5.3 of the Directive on Fleet Management: Executive Vehicles, and their prices are within the limits established by the Secretariat at the time they are published.

Objective:

To ensure that the Government of Canada demonstrates environmental leadership in the acquisition of executive vehicles

Good practices:

Manage executive vehicles with economy, equity, and probity, and in consideration of their effect on the environment, while meeting the needs of authorized users.

Considerations:

PWGSC determines what vehicles qualify for inclusion in the Executive Vehicle Listing (i.e. make, model, engine size, features, options, and price). Factors used by PWGSC to qualify executive vehicles are based on the following:

  • Vehicle class, number of cylinders, and fuel type, consistent with specifications in the Government Motor Vehicle Ordering Guide published by PWGSC. This information is used to determine whether the vehicle meets the standards in sections 5.3.3 and 5.3.4 of the Directive on Fleet Management: Executive Vehicles;
  • The total acquisition price, used to determine whether the vehicle meets the requirements of section 5.2.3 of the Directive on Fleet Management: Executive Vehicles;
  • For vehicles equipped with a four-cylinder conventional fuel engine, the estimated amount of carbon dioxide emissions per year, as outlined in the Fuel Consumption Guide published by Natural Resources Canada. This information is used to determine whether the vehicle meets the requirements of subsection 5.3.3c of the Directive on Fleet Management: Executive Vehicles; and
  • Treasury Board approval is required for exceptions to the executive vehicle standards.

4.2 Acquiring an executive vehicle

Departmental officials may select the appropriate vehicles from the Executive Vehicle Listing and prepare the corresponding requisitions to be sent to PWGSC headquarters for action.

Objective:

To ensure that executive vehicles, while meeting the needs of authorized users, are managed with economy, equity, and probity, and in consideration of their effect on the environment

Good practices:

  • Contact the Vehicle and Industrial Products Division of PWGSC before preparing a requisition for an executive vehicle to confirm the availability of the required vehicle.
  • 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 (see section 3.1).
  • Initiate the replacement of conventional fuel-powered vehicles when they reach their three year period. To support the government's green operations, the Directive on Fleet Management: Executive Vehicles requires that departments take this action on conventional fuel-powered vehicles. Departments may opt to use life-cycle costing principles, however, to determine when to replace hybrid and alternative fuel vehicles.

Considerations:

The production cycle of vehicles generally starts in September, and it is common for automotive manufacturers to stop taking orders for the current year's model in March or April. Any planning for the acquisition of a new executive vehicle should therefore be in line with the normal production cycle. If a requisition for an executive vehicle is sent to PWGSC in June, there will probably be a longer wait than what is indicated above for the delivery of the vehicle.

Note: In accordance with the Directive on Fleet Management: Light Duty Vehicles, dealer stock purchases are made only on an exceptional basis, with the approval of PWGSC, and only if there is absolutely no other alternative available to meet the customer requirements. Section 4.5 of the Guide to Fleet Management, Chapter 1: Light-Duty Vehicles provides details on the procedures to follow if the need to acquire executive vehicles through dealer stock occurs.

5. Operation, Use, and Maintenance

5.1 General

Objective:

To ensure that executive vehicles, while meeting the needs of authorized users, are managed with economy, equity, and probity, and in consideration of their effect on the environment

Good practices:

  • All costs related to operating and maintaining executive vehicles should be borne by the department that owns the vehicle.
  • Fines for traffic violations committed by the driver of the vehicle, such as speeding and unlawful parking, will not be paid with departmental funds.

5.2 Data collection and fleet card

Objective:

To maintain accurate data on fuel use and maintenance

Good practice:

  • Assign a fleet card to each executive vehicle to capture transactions related to that particular vehicle. The card should not be used for purchases for any other vehicle or equipment. Emergency transactions not paid by the fleet card should be reported to the appropriate authority for manual entry into the fleet management database. Details on the appropriate use of a fleet card can be found in section 5.5.2 of the Guide to Fleet Management, Chapter 1: Light-Duty Vehicles.

Note: A national master standing offer for Fleet Management Support Services that includes the use of a fleet card 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 the fleet card service provider and PWGSC standing offer agreements with major fuel suppliers, tire and tube manufacturers, vehicle dealers, parts distributors, and other fleet-related service providers.

5.3 Supporting a green executive fleet

To demonstrate leadership by example, the environmental criteria contained in section 5.3.3 of the Directive on Fleet Management: Executive Vehicles restricts the acquisition of executive vehicles to hybrids, alternative fuel vehicles, and vehicles that run on fuel-efficient four-cylinder gasoline engines. As a result of the application of these criteria, the executive fleet is essentially composed entirely of green vehicles.

Objective:

To ensure that the environmental impact of executive vehicles is taken into consideration

Good practices:

  • Use low-level ethanol fuel (commonly referred to as E10) for gasoline-powered vehicles and alternative fuels such as E85 ethanol/gasoline on flexible fuel vehicles whenever available. Section 5.4.9 of the Directive on Fleet Management: Executive Vehicles requires that E10 fuel be used whenever available in all executive vehicles equipped with engines that operate on regular gasoline. In addition, section 5.4.10 requires that vehicles equipped to operate on E85 ethanol use this fuel whenever available.
  • Develop guidelines to assist drivers of executive vehicles to identify conveniently located fuel stations that supply E10 and E85 fuels. Such guidelines should also emphasize the policy requirements and provide clear instructions for these drivers on measures to be taken to ensure compliance with these requirements.
  • Maximize access to alternative fuels for government vehicles using the additional measures outlined in section 5.1 of the Guide to Fleet Management, Chapter 1: Light-Duty Vehicles.
  • Employ measures to eliminate unnecessary idling of executive vehicles. A list of suggested measures is contained in section 5.4.4 of the Guide to Fleet Management, Chapter 1: Light Duty Vehicles.
  • Consult the Green Fleet Management Checklist in Appendix D of the Guide to Fleet Management, Chapter 1: Light-Duty Vehicles. Organized according to the four phases of the materiel life cycle, this is a checklist of good environmental practices related to the management of light-duty vehicles.

Note: Information on alternative fuels and E10 fuels, including the locations of refuelling stations across Canada, can be obtained from the Office of Energy Efficiency on the Natural Resources Canada website.

6. Insurance

6.1 Coverage

Authorized users of executive vehicles and persons related to the authorized users are entitled to make personal use of these vehicles when they are not required for official use. Such use of a government vehicle exposes these users 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 Fleet Management Directive: Executive Vehicles that departments insure executive vehicles adequately.

Objective:

To ensure that risks associated with both official and personal use of executive vehicles are adequately managed.

Good practice:

  • Ascertain that the executive vehicle insurance policy includes, as a minimum, the following:
    • 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 $300.

Note: Information on the appropriate insurance coverage can be obtained by contacting the Vehicle and Industrial Products Division of PWGSC.

6.2 Required information for PWGSC and the insurer

Objective:

To ensure that executive vehicles have appropriate insurance coverage at all times.

Good practices:

  • Inform the Vehicle and Industrial Products Division of PWGSC before accepting the delivery of an executive vehicle. Failure to do so may result in the executive vehicle of the incumbent not being insured.
  • Provide, as a minimum, the following information to the appropriate PWGSC authority in the Vehicle and Industrial Products Division for each executive vehicle to be insured:
    • owner (department or agency);
    • year, make, and model of vehicle to be insured;
    • vehicle identification number (VIN);
    • vehicle licence plate number;
    • registration identification number (RIN), where applicable;
    • driver information (including occasional drivers):
    • names of principal drivers;
    • names of secondary drivers;
    • date of birth of drivers;
    • drivers' licence numbers and province(s) of issue; and
    • interdepartmental settlement code, for invoicing purposes.

Note: No information is required for a driver who will use the vehicle only once or twice per year.

6.3 Invoicing and claims

PWGSC is responsible for securing commercial insurance coverage for the fleet of executive vehicles. It pays the insurance company at the beginning of the insurance coverage period and invoices the department or agency for coverage of the particular vehicles at the end of the coverage period.

Objective:

To ensure that executive vehicles have appropriate insurance coverage at all times.

Good practices:

  • Promptly inform the Vehicle and Industrial Products Division of PWGSC of any changes in the executive fleet status, particularly if an executive vehicle is transferred to another organization.
  • Contact the insurance broker, Aon Reed Stenhouse Inc., for assistance on all insurance claims for executive vehicles. The number to call is 613-722-7070 for executive vehicles located in the National Capital Region and 1-800-267-6262 for executive vehicles located elsewhere in Canada.

7. Replacement, Transfer, and Disposal

7.1 Replacement of an executive vehicle

Objective:

To ensure that the life-cycle management of executive vehicles is performed in a cost effective and efficient manner

Good practice:

Replace executive vehicles based on life-cycle costing measures, taking into consideration all relevant factors. Particular attention should be paid to section 5.2.5 of the Fleet Management Directive: Executive Vehicles. Life-cycle costing measures for executive vehicles should be consistent with the methods used to determine replacement of other departmental vehicles.

7.2 Transferring an executive vehicle

Good practices:

  • Transfer an executive vehicle from one department to another, if required. It is important to inform the Vehicle and Industrial Products Division of PWGSC of any such transfer promptly. In compliance with section 4.3 of the Directive on Disposal of Surplus Materiel, departments can transfer executive vehicles to other federal departments and agencies, either gratuitously, at book value, or at market value.
  • Transfer a vehicle from the executive to the departmental fleet when justified. The conditions outlined in section 5.2.5 of the Fleet Management Directive: Executive Vehicles, however, still apply (that is, the vehicle being replaced is less than three years old or has travelled less than 150,000 km); otherwise the price limit will be reduced by 15 per cent on the acquisition of the replacement vehicle.

7.3 Disposal of an executive vehicle

Good practice:

Dispose of executive vehicles using the standing offer for vehicle disposal services awarded by PWGSC in accordance with section 4.8 of the Directive on Disposal of Surplus Materiel. Departmental fleet managers should be familiar with this standing offer and should be involved in the disposal of executive vehicles. The current standing offer is in place with the Independent Canadian Auction Network.

Note: To ensure that executive vehicles are properly insured at all times, departments should inform the Vehicle and Industrial Products Division of PWGSC of all executive vehicle transfers, replacements, and disposals.

8. Personal Use and Taxable Benefit

Ministers, ministers of state, secretaries of state, deputy ministers , or eligible senior officials may request that the executive vehicle provided to them also be available for their personal use. Personal use includes any use that is not for official business. A definition of "personal driving" is provided in Chapter 2, "Automobile and motor vehicle benefits and allowances," of the Employer's Guide - Taxable Benefits and Allowances published by the Canada Revenue Agency (CRA).

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 administrative arrangements recommended below apply.

Objective:

To ensure that executive vehicles are managed with economy, equity, and probity

Good practices:

  • Capture essential data on executive vehicle costs and usage by using a log book as well as the fleet management information system and companion fleet card currently available through the standing offer for fleet management support services. This enables departments to take a life cycle management approach to monitoring the use as well as the cost of maintaining, repairing, and operating executive vehicles.
  • Conform to the requirements of the Income Tax Act and its regulations. Information on these requirements, including calculation of the taxable benefit and completion of T-4 forms (and RL-1 slips for Quebec income tax) can be found in the Interpretation Bulletin IT-63R5 and its subsequent revised editions, available from CRA. 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.

Note: It is strongly recommended that departments refer to the Employers' Guide-Taxable Benefits and Allowances published by CRA. Chapter 2, "Automobile and motor vehicle benefits and allowances," contains a worksheet for calculating automobile benefits.

If the contents of the Directive on Fleet Management: Executive Vehicles 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 the Directive on Fleet Management: Executive Vehicles for internal administrative directives.

9. References

All departments that require executive vehicles should consult the documents listed below.

10. Enquiries

Please direct enquiries about this policy instrument to the organizational unit in your department responsible for this subject matter. For interpretation of this policy instrument, the responsible organizational unit should contact: TBS Public Enquiries.


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