Archived [2023-12-13] - Guidelines on Fleet Management, Chapter 1: Light-Duty Vehicles

Management Control - Text version

“Chart illustrates the relationship between the four asset life cycle management phases. The four phases include: planning and monitoring, acquisition, use and operation, and disposal. Planning and monitoring feeds into and incorporates processes from all three of the other phases. The final three phases follow a logical approach where acquisition related management processes feed into use and operation, while use and operation processes feed into disposal.”

Materiel management strategies should always take into consideration the full life cycle costs and benefits of alternatives to meeting program requirements.

By using life cycle costing techniques, the total costs to the Crown of owning or leasing materiel assets can be evaluated prior to acquisition. This is accomplished by taking into account such factors as operation and maintenance costs, and possible future disposal costs in addition to capital costs. Estimating life cycle costs also creates standards by which costs can be monitored and controlled after acquisition. By adopting this approach throughout, departments can move towards ensuring that their materiel management decisions are financially prudent and represent the best value to the Crown.

Departments and agencies are responsible for the management of light-duty vehicles.

Light-duty vehicles are purchased using departmental budgets and, although central agency direction can influence purchasing decisions, departments and agencies are fundamentally responsible for deciding how many vehicles they require and the composition of vehicles necessary to fulfil their operational duties.

Departments and agencies are essentially responsible for all phases of the light-duty vehicle life cycle; however, they are guided by the policy direction provided by the Treasury Board of Canada Secretariat. Most departments and agencies have in place their own internal policy related to the ownership, use, maintenance, and disposal of light-duty fleets, while other departments and agencies may simply refer to the applicable Treasury Board policies, directives, and regulations.

Additional detail on the roles and responsibilities of departments and agencies related to light-duty vehicles is contained in the Policy on Management of Materiel.

Before acquiring a new vehicle, departments should consider whether a new requirement could be met using the existing fleet. They should examine current vehicle utilization to determine whether pooling is feasible, particularly if some vehicles are being underutilized. For example, if two vehicles with low annual kilometres or low daily use are parked near each other, perhaps one of them could be pooled and the other one disposed of.

When it has been determined that the existing fleet cannot meet a requirement, departments should consider using alternative methods of transportation to meet the requirement. These may include, but are not limited to the following:

• Vehicle rentals (short-term or seasonal),
• Taxis,
• Privately owned vehicles,
• Public transit,
• Shuttles,
• Car-sharing services, and
• Outsourcing (e.g., courier services)

Operational needs in some departments may require that the department own the vehicle (e.g., the Royal Canadian Mounted Police’s dog master) because alternative methods of transportation such as rentals are not practical.

Departments should establish annual utilization guidelines to justify the acquisition of a Crown-owned light-duty vehicle.

In general, ownership is not cost-effective for light-duty vehicles that will travel less than 20,000 km per year or that will be used less than 200 days per year. It depends on the category, type, use and location of the vehicle. For example, annual travel and utilization may be much higher for a police cruiser than for a farm research pick-up truck.

Departmental fleet policies should require that ownership of light-duty vehicles that travel less than 20,000 km per year or that are used less than 200 days per year be formally justified. The justification should specify the operational requirements that dictate the low usage (e.g., specialty vehicle, emergency vehicle, vehicle operating in a remote location and/or confined area, vehicle that is used seasonally).

Appendix A describes the four main categories of light-duty vehicles and lists the subcategories of functions for each category.

Appendix B sets out the benchmarks for annual utilization, by vehicle category.

Estimated requirements for light-duty vehicles should be sent to Public Works and Government Services Canada as early as possible each fiscal year to allow for better planning and more cost-effective ownership.

To manage transportation effectively, departments should understand the potential length of time between ordering a vehicle and receiving a vehicle.

Prior to selecting a vehicle class to meet operational requirements, departments should consider opportunities to rationalize either the overall fleet size or the class they are considering.

In considering a rationalization of the overall fleet size, departments may want to consider whether one new vehicle, e.g., a minivan, would be able to meet the range of transportation requirements previously satisfied by two vehicles, e.g., a mid-size sedan and a full-size van.

In assessing opportunities to rationalize a particular vehicle class, departments may want to consider the following:

• The smallest vehicle class practical should be selected 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 using alternative transportation modes.
• Consideration should be given to whether a smaller vehicle or engine can meet the transportation requirement previously or currently met by a larger vehicle. For example, a newer model year full-size half-ton pickup with a smaller but more efficient engine may satisfy the transportation requirement previously met using a full-size three-quarter-ton pickup truck with a larger engine.

A competitive request for standing offer is issued every year around June, in which manufacturers are requested to provide prices for new model year vehicles in accordance with specifications and popular option combinations contained in the Government Motor Vehicle Ordering Guide. DISOs are then issued (effective September 1) to those manufacturers offering the lowest responsive price on each specific item, including all alternative fuel vehicles available from these manufacturers.

The evaluation of bids takes into consideration the fuel consumption and greenhouse gas emissions for all vehicles with a gross vehicle weight rating of up to 3,856 kg (8,500 lbs.). Vehicles can be ordered until the expiry date of the standing offer, which is usually July 31.

The specifications, options, and prices of the vehicles offered at the lowest responsive or a lower responsive cost are identified in the document entitled DISO Prices on the PWGSC vehicle procurement website. PWGSC clients across Canada can use this information to order the vehicles that best meet their requirements.

The manufacturers’ vehicle inventory (MVI) method of supply was introduced to supersede the dealer stock method of supply.

Urgent vehicle requirements often arise as a result of accidents, theft, fire, program changes, etc. At one time, these vehicles could be supplied only through dealer stock purchases. However, the vehicles on the dealers’ inventories were mostly outfitted with options tailored for the consumer retail market, making them more expensive than the fleet vehicles normally required to meet the federal government’s operational needs. In addition, discount levels from dealerships were not and are still not as significant as those provided to the federal government for vehicles ordered from the DISO. The MVI method is designed primarily to assist PWGSC client departments with urgent vehicle requirements.

MVI consists of PWGSC ordering vehicles through the DISO several times per year, for a variety of typical government vehicles to be held in manufacturers’ storage lots until needed. Should a client department require a vehicle on an urgent basis, the PWGSC vehicle procurement officer quickly issues a contract to the manufacturer with shipping instructions, and the delivery is effected anywhere in Canada from the storage lot to the appropriate local dealership.

Departments should consult with PWGSC vehicle procurement officials in order to confirm the availability of MVI vehicles and to reserve them.

As indicated under "manufacturers’ vehicle inventory," urgent vehicle requirements often arise as a result of accidents, theft, fire, program changes, etc. Most of these urgent requirements are filled through PWGSC’s MVI program. However, some vehicles cannot be provided through MVI and should be purchased from local dealers’ stocked inventories. The dealer stock method is the least desirable and the most costly of the vehicle procurement methods of supply, but it is still a necessary tool in the complete supply system.

PWGSC regional offices can handle dealer stock purchases of passenger cars and light-duty trucks, provided that the authority to proceed has been granted by PWGSC headquarters. Executive vehicles are to be purchased exclusively by the vehicle procurement officials at PWGSC headquarters.

In accordance with the Directive on Fleet Management: Light Duty Vehicles, dealer stock purchases should be avoided whenever possible. They should be 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.

Requisitions are allocated by PWGSC headquarters to regional offices. The Vehicles Team forwards an authorization form along with the requisition to the appropriate regional office with instructions to send a copy of the contract to the Vehicles Team in order to input the pertinent data into the Vehicle Statistical Information System (VSIS). This is also a follow-up system to ensure that the contract has been issued.

Section 4.5 of these guidelines provides details on the procedures to follow if the need to acquire vehicles through dealer stock occurs.

On occasion, vehicle requirements might not be appropriate for the above-mentioned methods of supply, whereas individual purchases for particular vehicles are more suitable to meet particular needs.

For example, Foreign Affairs, Trade and Development Canada requires some vehicles for export to various countries worldwide. The vehicles in question should meet motor vehicle safety standards that are in effect in the countries where the vehicles will be utilized. Many provisions should be considered for these vehicles, such as the preparation for overseas shipping, the shipping costs, and the availability of dealer services in particular countries, etc.

Departments considering the "special production" method of supply should consult with PWGSC vehicle procurement officials for further advice.

To ensure compliance with the Alternative Fuels Act, departments should meet the following criteria prior to selecting an alternative fuel vehicle:

• Vehicles in a rationalized fleet should first be identified as good candidates for using alternative fuels based on operational feasibility considerations.
• A vehicle should also meet the cost-effectiveness test. If the proposed vehicle is cost-effective, it is then confirmed as a cost-effective candidate for use of alternative fuels. It can be replaced with an alternative fuel vehicle purchased from a manufacturer, converted in the aftermarket, or rented as a vehicle capable of operating on an alternative fuel.

Appendix C to this chapter contains additional information on these criteria.

The following should be considered prior to purchasing a manufactured alternative fuel vehicle:

• Consider whether the vehicle is a dedicated alternative fuel vehicle or a flex-fuel or bi-fuel vehicle capable of operating on gasoline and an alternative fuel. Operational feasibility considerations will also determine this choice.
• Alternative fuel vehicles that are certified to Environment Canada emission standards will not require testing.

Departments should consider the following prior to converting a gasoline vehicle to alternative fuel capability:

• The integrity of the basic vehicle warranty should not be affected by converting a gasoline vehicle to use an alternative fuel. Departments will use the same source of supply to purchase and install fuel conversion equipment to avoid conversion warranty problems. Conversion contractors should provide a minimum one-year written warranty on the performance of equipment and the quality of installation. PWGSC issued standing offers for vehicle conversions until September 2005. These standing offers specified emission standards and emissions monitoring guidelines associated with converted vehicles; departments should still comply with such standards.
• Emissions associated with vehicles converted to alternative transportation fuel do not fall under Environment Canada’s jurisdiction, as they are no longer new vehicles. Instead, converted vehicles are subject to in-use vehicle emission standards. In Canada, in-use emissions testing programs are administered provincially and are in place only in Ontario with the Drive Clean program and in British Columbia with the AirCare program. Both programs target only areas of increased transportation-based air pollution and are not province-wide. Both are based on the Environmental Protection Agency’s regulations for in-use vehicle emissions.

Moving conversion equipment from one vehicle to another is not recommended. However, when conversion equipment is reused, it should comply with the requirements in the paragraph above and renewed warranty provisions should exist for the installation and use of the alternative fuel equipment in a second vehicle.

An effective alternative fuel vehicle should meet emission standards throughout the vehicle’s useful life cycle. Departments should maintain their vehicles regularly in accordance with the manufacturer’s specifications.

Departments are to maintain the Transport Canada fuel consumption rating for each vehicle in the fleet, and the dates and kilometre readings when the emission tests are conducted in the fleet database. Copies of all emission test results (and corrective action taken in the case of failed tests) are to be retained on file for any audit or inquiry from internal auditors or TBS.

Departments should consider the following prior to entering into a vehicle lease:

• Long-term leasing is not cost-effective and should not be used as a means of expanding the departmental fleet.
• It is highly recommended that rentals be used to meet temporary, short-term, and seasonal requirements. Leases or rentals should not be used to meet ongoing program-related transportation requirements.
• Regular renewals of leases or rentals should be avoided. Departments should consider vehicle ownership if the requirement for transportation is ongoing.
• Departments should carry out a buy-versus-lease/rental study prior to entering into a lease or rental arrangement to ensure the most cost-effective mode of transportation is acquired.
• Leased or rented vehicle classes, engines, options, and minimum features should be consistent with those contained in the Government Motor Vehicle Ordering Guide .
• Vehicle leases and rentals are contracts and should be entered into in compliance with the Treasury Board Policy on Managing Procurement .

Departments opting to lease vehicles should note that only operating leases are permitted. The Financial Administration Act prohibits capital leases. The most recent operating leases were available through the PWGSC standing offers for vehicle leases until the end of September 2006.

The Directive on Fleet Management: Light Duty Vehicles requires federal government employees to purchase low-level ethanol fuel (commonly referred to as E-10) for gasoline-powered vehicles, whenever available, when travelling for government purposes. This includes travel in a rented, leased, or government-owned vehicle.

The Ethanol Expansion Program (EEP) aims to increase domestic production and use of ethanol, a renewable transportation fuel, and reduce transportation-related greenhouse gas (GHG) emissions. The current strategy is to promote and encourage the use of ethanol-blended gasoline, in both low-level (up to 10 per cent ethanol) and high-level (up to 85 per cent ethanol, E-85) blends. Most vehicles can use low-level blends today, and flexible-fuel vehicles can use E-85. For more information, visit Natural Resources Canada’s alternative fuels website.

Low-level ethanol blends are available at service stations across Canada.

Departments are encouraged to develop guidelines to assist drivers of departmental vehicles to identify conveniently located fuel stations that supply E-10 fuel. Such guidelines should also emphasize the requirements of this directive and provide clear instructions for drivers on measures to be taken to ensure compliance with these requirements.

For more information on low-level ethanol blends, visit the Canadian Renewable Fuels Association’s website.

Departments and agencies should take reasonable measures to increase access to alternative fuel for departmental vehicles, including:

• identifying and communicating to drivers the location of accessible alternative fuel refuelling sites within range of departmental motor vehicles;
• establishing practical guidelines for drivers of government motor vehicles to purchase alternative fuel (and E-10) at sites that may not be as conveniently located as conventional refuelling sites;
• maximizing current owned fuelling infrastructure, e.g., by installing vehicle refuelling appliances (VRAs) for natural gas; and
• building alternative refuelling facilities at a departmental site, where appropriate.

The Values and Ethics Code for the Public Sector states that public servants should at all times act in such a way as to uphold the public trust. Public servants shall perform their duties and arrange their private affairs so that public confidence and trust in the integrity, objectivity, and impartiality of government are conserved and enhanced. Public servants shall act at all times in a manner that will bear the closest public scrutiny.

In accordance with the principles of the Values and Ethics Code, government employees are not permitted to accumulate rewards and/or points on their own personal loyalty cards (e.g., Air Miles, Petrol-Points, or other types of reward points) for fuel purchases made using the government fleet credit card while operating a government vehicle for government business. Further, government employees are not permitted to receive cashbacks for fuel purchases and/or repairs made using the Government of Canada fleet card.

The Policy on Conflict of Interest and Post-Employment provides specific guidance on avoiding and preventing situations that could give rise to a potential, apparent, or real conflict of interest. These measures are key to helping ensure that the public service can and will be seen to be carrying out its responsibilities in an objective and impartial manner. The conflict of interest measures prohibit the solicitation of gifts, hospitality, or other benefits for personal gain.

Fraudulent use of a fleet credit card (e.g., receipt of kickbacks, theft, etc.) is a criminal offence against the Crown and may result in severe penalties. Departments are reminded to ensure that they have control measures in place to avoid improper practices and illegal acts related to the use of the fleet credit card. Any improprieties and allegations of offences against the Crown should be reported and investigated, and departments should take appropriate action.

Departments should ensure that any and all safety issues associated with refuelling are communicated to users of departmental vehicles. Basic safety procedures should be followed when refuelling vehicles. Departments should consult with their departmental Occupational Health and Safety coordinator for additional information.

Departments should consider that a common definition of authorized driver includes:

• departmental employees on authorized duty and authorized by a responsibility centre manager to operate departmental vehicles to conduct departmental business; and contractors, when authorized by the term of a contract defining the usage of a departmental vehicle to carry out their responsibilities.

Departments should also consider that a common definition of employee includes:

• full-time, part-time, casual, seasonal, term, and indeterminate employees and students.

To ensure all employees acknowledge the terms of use of a departmental vehicle, departments may consider requiring employees to review and sign a form detailing authorized and appropriate use of a government vehicle.

The authority to use a departmental motor vehicle would be valid until the form is withdrawn, but should be reviewed at least annually by a manager.

Content of such an authorization form may include:

• a requirement to possess a valid driver’s licence for the province or territory that employee resides in;
• a requirement to inform the manager immediately if a driver’s licence is revoked, suspended, or restricted for any reason;
• understanding that departmental vehicles can be used only for official government purposes;
• an understanding that unauthorized use of a government vehicle may result in disciplinary action and that, in the event of a motor vehicle accident, the employee may be responsible for reimbursing all costs;
• an understanding that prior approval should be obtained to transport non-federal passengers in a departmental vehicle;
• an understanding of requirements under the Income Tax Act; and
• an understanding that the employee is responsible for all traffic violations (e.g., speeding, illegal parking, etc.), as well as damage from accidents due to driver negligence while in possession of, or driving, a departmental vehicle.

Departments should obtain, and retain a record of, proof of insurance, including an indemnification to the Crown, from authorized drivers who are not government employees before such drivers are permitted access to a departmental vehicle. Access to departmental vehicles should be withdrawn once the proof of insurance coverage expires.

Departments should consider that a common definition of authorized passenger includes:

• a person authorized to travel in departmental vehicles by the responsibility centre manager, including any departmental employee on authorized duty; any employee of another federal, provincial, territorial, or municipal government working with the department; and any official visitor designated as such by the vehicle custodian.

Only authorized passengers may be carried in departmental motor vehicles; however, a motor vehicle operator may provide emergency transportation without prior authorization under the following circumstances:

• medical emergencies;
• at the request of law enforcement officers; or
• when necessary for security or other operational reasons.

Such instances should be documented by the driver as soon as possible following completion of the trip and documentation should be provided to the appropriate manager.

An emergency situation does not include transporting relatives, family, or friends to school, daycare, work, or appointments. Family members should not travel in a departmental vehicle when employees are on travel status and a departmental vehicle is the approved mode of transportation.

In deciding on the most appropriate manner of underwriting the risk to the Crown for damage to the vehicle, driver injury, or third-party claims, departments should consider the following:

• Non-government employees (i.e., contractors) should not purchase insurance (and conversely, the government should not pay for contractors’ insurance) on risks that are clearly the responsibility of the government unless the respective responsibilities are so commingled that they are indistinguishable.
• Non-government employees (i.e., contractors) should not be indemnified by the government against the risks to which only the contractors are exposed.
• Departmental legal advisers should be consulted whenever there is any question as to the type of risk involved.

For situations where contractors may be required to use departmental vehicles, there are four basic options available to departments to ensure appropriate use of insurance and the appropriate approach to risk management:

Departments should ensure that users of federal vehicles are aware of interpretations of personal use in the Income Tax Act by reading the Canada Revenue Agency’s Automobile and motor vehicle benefits and Chapter 2 of the Employer’s Guide T4130 on Taxable Benefits.

Departments should comply with the requirements of the Income Tax Act by establishing a system to ensure personal use of vehicles is declared and the taxable benefit is properly applied.

The corporate signature ("Government of Canada" or departmental name, in both languages, with the Canadian flag) and the Canada wordmark should appear on all motor vehicles, including vehicles on long-term leases, in accordance with requirements of the TBS Federal Identity Program Policy (FIP).

To identify vehicles on short-term rentals, departments may consider using temporary markings such as a placard displayed on the vehicle or a magnetic-backed marking, instead of the more permanent standard markings.

In the case of designated leadership vehicles, additional FIP-approved marking is acceptable.

Departments citing concerns of safety for vehicles bearing standard markings may consider temporary markings, such as a magnetic-backed marking or placard, for such situations.

Departments seeking exemption from the FIP Policy should contact the FIP policy centre directly.

Measures departments should employ to eliminate unnecessary idling may include:

• issuing a formal policy or directive on idling in departmental vehicles;
• educating drivers of government vehicles on the cost and environmental impacts of idling; and
• identifying and considering alternatives to idling to ensure driver comfort in specific situations such as auxiliary power units.

Smoking is not permitted in government vehicles as they are considered part of the workplace. In accordance with the Non-Smokers’ Health Act, employers have an obligation to promote a safe and healthful working environment that is free, to the extent possible, of tobacco smoke and they should ensure that no person smokes in the workplace.

While this Regulation does not specifically prohibit smoking in motor vehicles when occupied by only one employee, departments are required to promote vehicle sharing and pooling to the maximum extent possible. Employees that are sharing motor vehicles should not be exposed to the effects of smoking in a motor vehicle.

Departments should take measures to discourage the use of cellular telephones (handheld and hands-free) while operating a departmental vehicle. Departments should emphasize and communicate all of the safety issues associated with using a cellular telephone while operating a departmental vehicle.

All federal and provincial laws and regulations governing the use of cellular telephones should be observed and override any information contained in this directive in the event of a discrepancy between those laws and regulations, and this directive.

Departments may choose to seek recovery of any motor vehicle accident costs resulting from cellular telephone use and a failure to observe any applicable federal and provincial laws and regulations on the part of the driver.

Departments should comply with provincial legislation and regulations for vehicles by:

• registering vehicles, including paying for compulsory inspections, driver examinations, or other requirements, unless specific agreements exist to the contrary; and
• paying environmental levies on tires or batteries that may be payable to these provinces under federal-provincial reciprocal taxation agreements.

Where possible, departments should arrange for bulk registration of vehicles to reduce administrative costs. The first line of all addresses on vehicle registrations should include consistent wording to refer to the department, such as the department’s applied title.

Departments should provide, or participate in, driver training courses where appropriate and required, including:

• green defensive driving courses ;
• refresher training to acquaint personnel with changes in equipment or operating conditions;
• remedial training to offset specific weaknesses indicated by accident records, traffic violations, or other instances of inadequate operating performance;
• appropriate procedures for refuelling propane tanks; and
• vehicle operator awareness programs for reducing fuel consumption and emissions.

While this course focusses on safe driving practices, it also highlights the environmental benefits associated with defensive driving. This course is available as a one-day classroom course or a two-hour online course.

Departments interested in this course should contact the Canada Safety Council.

For additional safety, departments may want to consider the use of snow tires on all vehicles during the winter season. These guidelines promote this as a good practice on all existing vehicles in the fleet, where appropriate, and not necessarily at the time of vehicle acquisition.

All federal and provincial laws and regulations governing the use of snow tires on motor vehicles should be observed and override any information contained in these guidelines in the event of a discrepancy between the laws and regulations, and these guidelines.

Part XVI of the National Joint Council Occupational Health and Safety Directive emphasizes the importance of safety in the operation of government vehicles. It is essential that vehicles remain mechanically safe and they should be operated in a prudent manner. Employees are not required to operate a vehicle that is deemed unsafe or that is loaded in a hazardous manner.

Buses and motor vehicles used for transporting flammable substances should be equipped with a dry chemical fire extinguisher. Information on the rating, standards, and location of the fire extinguisher is provided in Part XVI of the National Joint Council Occupational Health and Safety Directive.

Motor vehicles shall be equipped with first aid kits in accordance with the requirements of Part XVI, Schedule I, subsection 16.7(1), of the Canada Labour Code.

Every motor vehicle accident is to be investigated, the cause or causes determined, and appropriate corrective action taken. Additionally, a hazardous occurrence accident report shall be completed in compliance with section 15.3 of Part XV, "Hazardous Occurrence Investigation, Recording and Reporting," of the Canada Labour Code.

In order to be consistent with section 15.11 of Part XV identified above, departments shall maintain a written record of vehicle repairs or replacement as a result of accidents for a period of 10 years.

In addition, departments should complete a copy of the Motor Vehicle Accident Report (GC 46) form and maintain it, along with the vehicle’s history file.

Departments and agencies may obtain the services of a fleet management service provider by either issuing a call-up against a standing offer for fleet management support services (PDF document) negotiated by the federal government or engaging in a separate competitive process if warranted.

Departments and agencies should monitor fuel consumption and vehicle operating and maintenance records to ensure that they are up to date. Regular monitoring of these data will ensure accuracy and integrity of data and better data for internal and external reporting purposes.

Departments should track data related to all alternative transportation modes, including daily rentals, vehicle leases, personal motor vehicle use, and taxis to enable effective management of transportation within the organization. Essential data to be collected include the duration and distance of trips taken, the total number of trips, and the associated cost.

Departments are not obligated to report and/or enter fleet-related information in the vehicle management database on ancillary equipment that can be transferred from one vehicle to another and that will be removed prior to disposal (e.g., safety screens, weight tie-downs, light bars, winches, aftermarket electronic equipment, etc.).

Odometer readings should be reported regularly—at the very least, on a monthly basis—to ensure the fleet information system is current.

Departments ensure the following best practices are followed:

• A separate electronic credit card should be assigned to capture transactions for each individual vehicle. A vehicle-assigned fleet credit card should not be used for purchases for other vehicles or equipment.
• Use of non-specific fleet cards should be discouraged.
• Work covered by warranty should be allocated against a specific vehicle by contacting the appropriate authority for manual entry into the vehicle management database.
• Any fleet-related transactions not paid using a fleet credit card (i.e., fuel, maintenance, and repairs) should be reported to the appropriate authority for manual entry into the vehicle management database.
• Expenses paid with a fleet credit card are limited to those needed for the operation and maintenance of government vehicles and equipment. They include the following:
  • from oil companies - fuel, oil, lubricants, antifreeze, filters, windshield washing fluid, solvent, de-icing fluid; routine services such as tire repairs, battery charging, washing, towing, lubrication, and emergency repairs;
  • from maintenance and repair firms - all normal maintenance and repair services and parts essential to the operation of government vehicles or equipment; and
  • from tire outlets - the purchase of tires in accordance with the pricing structure in the tire and tube standing offer or agreement.
• Supplies and services not specified above cannot be purchased with a fleet credit card.
• Routine procurement of supplies for the sole purpose of accumulating an inventory of items such as batteries, tires, antifreeze, windshield washing fluid, oil, filters, spare parts, etc. cannot be paid with the fleet credit card. However, the cost of the individual items should be entered in the fleet management database once they are installed and/or once the service has been performed.
• In exceptional cases only , there may be instances where vendors do not accept the fleet credit card for vehicle-related purchases or services. They include small vendors located in remote areas, retail stores, some equipment installers, vehicle licence bureaus, etc., where only cash, cheques, or major credit cards (e.g., VISA, Mastercard, etc.) are accepted. These may be the only options available to the fleet credit card user at the time. In these instances, the following steps should be taken:
  • The fleet management services provider should be informed by the department of the non-acceptance of its fleet credit card by this vendor, and attempts should be made by the service provider to qualify the vendor; and
  • all vehicle-related transactions not paid using the fleet credit card should be reported and/or entered in the vehicle fleet management database.

Proof of ownership or leasehold interest by the federal government should suffice as proof of insurance for federal government vehicles. Departments may, however, obtain proof of insurance cards from the TBS website if deemed necessary.

While the federal government self-underwrites travel in government-owned vehicles, departments should consider obtaining commercial insurance for leased vehicles in the following circumstances:

• in provincial jurisdictions with regulations requiring minimum insurance coverage for long-term vehicle leases—in this instance, the department assumes any risks not covered by the insurance; and
• for leases and rentals in remote areas if there are offsetting advantages, such as easier claim settlement.

PWGSC arranges a contract annually to provide commercial insurance to cover third-party liability risks and personal injury for travel to the U.S. Damage to a federal vehicle registered in Canada while on official business outside Canada is covered by the self-underwriting policy.

Departments should provide the insurer, through PWGSC, with estimates of travel to the U.S. based on the prior year’s data. The insurer arrives at an annual charge for insurance and provides proof of insurance documents for vehicles on a request basis.

At the time a vehicle is purchased, departments should determine when it will likely be disposed of, estimate the cost of potential replacement and ensure that budgets take into account that cost.

Departments are encouraged to establish life-cycle guidelines for their light-duty fleets to support effective disposal planning. An appropriate life cycle for light-duty vehicles can vary widely across departments. This section provides the recommended benchmarks for departments to use in establishing their own life-cycle guidelines.

In general, departments should use 20,000 km per year as the basis when establishing life cycle guidelines for their light-duty fleet vehicles. Departments may use the following guidelines, which are based on that annual usage figure, when planning how long to keep a vehicle:

• Passenger cars (i.e., sedans and wagons) should be kept for a minimum of 6 years or 120,000 km before being disposed of.
• Light-duty trucks (i.e., pick-ups, vans and utility vehicles) should be kept for a minimum of 7 years or 140,000 km before being disposed of.

Departments can extend the life of their light-duty vehicles beyond the recommended guidelines when it is cost-effective to do so, provided that:

• The vehicles are not underutilized;
• Maintenance and repair costs are monitored and controlled; and
• The vehicles are safe and reliable.

For the disposal of government surplus assets, departments should be familiar with the Treasury Board Directive on Disposal of Surplus Materiel.

Appendix B provides additional benchmarks by vehicle category that may also be useful.

Departments should use the disposal services of the Crown Assets Disposal Directorate at PWGSC for vehicle disposals.

Trade-ins are not permitted for light-duty vehicles.

Transfers of vehicles between departments are permitted and should be consistent with TB policy on asset disposal and government accounting practices.