March 31, 2014
The purpose of this communiqué is to inform you of changes to the kilometric rates found under both Appendix A – Commuting Assistance Directive and Appendix B – Travel Directive, effective April 1, 2014 and to outline the reasons why an update was not provided for January 1, 2014.
In September 2013, a new contract was awarded for the provision of services to establish rates per kilometer to be used to reimburse employees authorized to use privately-owned vehicles for travelling a) to and from the workplace in accordance with the Commuting Assistance Directive, and b) on government business in accordance with the Travel Directive. The new contractor performed a review of each factor used in the calculation of the kilometric rates (i.e., fixed costs - depreciation, financing, registration and licensing, insurance, taxes. and variable costs – maintenance and repairs, fuel, oil, filters and lubrication; tires) to ensure they reflect the current automotive marketplace. They noted several areas where the previous findings needed to be reassessed. As a consequence, the National Joint Council Executive Committee needed time to properly analyse the results reported by the independent contractor before approving and publishing the recommended kilometric rates, hence the delay in the publication of revised kilometric rates.
Of particular concern were the changes to the insurance factor that had a noticeable impact on the rates for Alberta and Québec. In the past, the insurance factor was based on calculations performed more than 14 years ago and adjusted annually by the Consumer Price Index (CPI). Baseline values were therefore deemed out-of-date and needed to be revised to reflect current reality. Thorough research of current prevalent insurance premium rates for an average government employee was conducted and the figures were brought in line with actual market conditions. For example, in Quebec the previous average insurance cost being relied upon was $2775 per year. However, the recent evaluation concluded that the current actual average cost of automobile insurance in Quebec is $950. The same discrepancy was identified in Alberta where the number previously relied upon was $2750 per year whereas the current average cost for insurance is $1400/year.
The final figures also reflect the fact that provincial insurance laws differ when determining vehicle accident fault, subrogation or no-fault policies. In some provinces vehicle insurance is offered by private insurers only, while in other cases like in Québec, hybrid systems are in place where bodily injury insurance is provided by the province through its vehicle registration process and third-party liability is provided by private insurers. This distinction was taken into account in the calculation of the kilometric rate for Québec.
The outcome of the full review indicates variations in the kilometric rates that are comparable to past updates, with the exception of the provinces of Québec and Alberta where the rates are reduced, due mainly to insurance premiums as highlighted above. Also of note are the rates for the Northwest Territories and Nunavut that have increased principally due to higher estimated vehicle maintenance costs.
Given the time required to consider and understand the new report, it was decided that the proposed January 1, 2014 rates would not be published. However, the updated April 1, 2014 figures are based on the January 1, 2014 results and also reflect the usual quarterly fuel adjustments. The new kilometric rates are effective April 1, 2014 and, as such, are not to be applied retroactively. They can be found at
Commuting Assistance Directive, Appendix A: http://www.njc-cnm.gc.ca/directive/cad-datq/cad-datq-a1-eng.php
Travel Directive, Appendix B: http://www.njc-cnm.gc.ca/directive/travel-voyage/td-dv-a2-eng.php.