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CFS Annual Report - 2025

Reimbursement for Business Use of Personal Vehicles
Model Year 2025

Study prepared for
The Treasury Board of Canada Secretariat

by Corporate Fleet Services

November 2024

1. Executive Summary

Corporate Fleet Services (CFS) has been mandated by the Treasury Board of Canada Secretariat to perform the annual evaluation of per-kilometre Reimbursement Rates for government employees required to use their personal vehicles while performing government business. This study assesses all vehicle operating expenses and provides recommendations for Reimbursement Rates for each Canadian Province and Territory.

The present study is based on 2025 model-year vehicles and accounts for all of the following:

This report summarizes all assumptions, methodology, values and findings. It presents up-to-date recommended rates of reimbursement for consideration by the Treasury Board of Canada Secretariat.

1.1 Methodology and Evaluation

The recommendations for Reimbursement Rates are given for the model year 2025 for:

These rates are given on a per-kilometre basis, for each Province and Territory. This is intended to accurately account for differences in vehicle operating costs across Canada.

The recommendations are based on the total costs of operating privately owned or leased vehicles. In order to reflect realistic conditions, the study assumes an annual driving distance of 20,000 kilometres and ownership terms of both four and five years. Fixed costs include ownership expenses consisting of depreciation, financing or leasing interest and taxes, as well as vehicle insurance and registration. Variable costs cover fuel, preventative maintenance, repairs, tires and miscellaneous items. All cost variations between the Provinces and Territories are accounted for, as well as the special driving conditions in the three Territories.

Weighted average nationwide costs of operating personally owned or leased vehicles were determined to be $0.610 per kilometre, as compared to $0.585 in the previous Fuel Update (August 2024, for publication on October 1st, 2024) and $0.580 in the previous Annual Report (November 2023, for publication on January 1st, 2024). The increase versus the previous Fuel Update (August 2024, for publication on October 1st, 2024) was primarily driven by an overall rise of total ownership costs. In addition, increased maintenance costs as well as insurance costs in certain provinces also contributed to higher rates, however, to a lesser extent than ownership. On the other hand, lower gasoline prices had the opposite effect, tempering the overall increase in operating costs while at the same time slightly lowering the Commuting Rates.

The following table indicates Canadian average expenses by cost component as calculated in the current study, in dollars per kilometre, before rounding up to the nearest half-cent:

Cost component Cost (dollars/km) Cost sub-component Cost (dollars/km)
Ownership $0.268 Depreciation $0.177
Interest $0.042
Acquisition Sales Tax $0.049
Registration $0.005 Registration $0.005
Insurance $0.093 Insurance $0.093
Fuel $0.121 Fuel $0.121
Maintenance $0.119 Preventative Maintenance $0.058
Repairs $0.022
Tires $0.018
Miscellaneous $0.008
Maintenance Sales Tax $0.013
 TOTAL $0.606 Rounded up to $0.610 $0.606

The largest component of vehicle operating expenses is ownership (encompassing depreciation, interest and acquisition sales tax), which accounts for 44.3% of total costs, followed by fuel expenses at 20.0%.

2. Preamble

Corporate Fleet Services (CFS) has calculated Reimbursement Rates for business use of personal vehicles by government employees according to the methodology and parameters listed in a Statement of Work issued through a competitive RFP process. CFS is therefore pleased to present this study with its findings and recommendations, based on extensive research performed on behalf of the Treasury Board of Canada Secretariat.

2.1 Note on Methodology

The current study strictly follows the methodology described in the Statement of Work from the RFP response to solicitation No. 24062-22-299 from July 2023. It also reflects the methodology employed in the previous Annual Report (November 2023, for publication on January 1st, 2024) as well as subsequent Fuel Updates. The analysis is deemed to accurately reflect costs in the current Canadian automotive marketplace and is described in detail in Sections 3 through 6.

2.2 Policy Recommendations

It is our opinion that public employees continue to be reimbursed for government business use of personal vehicles on a cents per kilometre basis, reflective of the practice that has been in use since 1999. This is deemed to be consistent with current public and private sector practices as well as it accounts for a fair and simple reimbursement method in line with accepted reimbursement policies across Canada.

However, since there are substantial differences among the ten Canadian Provinces and three Territories, these rates are calculated separately for each Province and Territory in order to account for differences in vehicle operating costs.

3. Methodology And Cost Component Determination

3.1 Assumptions

The present study’s objective is to determine Reimbursement Rates for business use of personal vehicles by government employees in order to reflect current Canadian automotive market conditions as accurately as possible. To accomplish this, an in-depth analysis was performed on all components of the total cost of operating a vehicle.

The methodology employed follows all the elements listed in the Statement of Work that were similarly used in the previous Annual Report (November 2023, for publication on January 1st, 2024). The purpose was to calculate the different rates of reimbursement in cents per kilometre, separately for all ten Canadian Provinces as well as the three Territories. In light of this, we performed research and data analysis to calculate costs for the following components, which represent the total costs of running a personal vehicle:

  1. Fixed expenses
    • Ownership
      • Depreciation
      • Prevalent retail rebates
      • Financing methods
      • Prevalent interest rates
      • Applicable sales taxes
      • Projected resale values
    • Registration and licensing
    • Insurance

  2. Variable expenses
    • Fuel
    • Vehicle maintenance
      • Preventative maintenance
      • Projected costs of repairs beyond the manufacturer warranty
      • Tires
      • Miscellaneous expenses

All calculations assumed four- and five-year retention periods as well as considered all vehicles to run an average of 20,000 kilometres per year.

In addition, in order to assess current prevalent insurance premiums by Province and Territory, the study used a certain demographic to reflect the average government employee. The demographics are based on data available from the Treasury Board of Canada Secretariat as well as Statistics Canada. The following characteristics were used:

The following table gives an overview of the cost proportion of the components involved in total expenses of operating a vehicle:

Expense Cost Proportion
Acquisition Sales tax 8.1%
Depreciation 29.3%
Fuel 20.0%
Insurance 15.3%
Interest 6.9%
Maintenance Sales Tax 2.1%
Preventative Maintenance 9.6%
Registration 0.8%
Repairs 3.6%
Tires 3.0%
Miscellaneous 1.3%

3.2 Vehicle Selection

In order to be reflective of the Canadian marketplace we have performed a thorough study throughout all Provinces and Territories, focusing on 55 vehicle models (nameplates) grouped under four vehicle classes for the Provinces, and three classes for the Territories. The models studied account for a significant portion of the Canadian vehicle market, and they were deemed representative of the types of vehicles used by government employees.

The following list describes the parameters used:

Make Model Class Weight for Provinces 2025 Model Year Pricing*
Honda Civic Compact 3.3% $33,230
Toyota Corolla Compact 3.2% $26,425
Hyundai Elantra Compact 2.3% $25,874
Volkswagen Jetta Compact 1.4% $30,145
Kia K4 Compact 1.3% $28,345
Nissan Sentra Compact 1.3% $27,898
Mazda 3 Compact 1.2% $29,495
Subaru Impreza Compact 0.4% $32,090*
Volkswagen Golf Compact 0.3% $39,545*
Kia Soul Compact 0.2% $26,695
Toyota RAV4 Small Crossover/SUV 9.0% $35,080
Honda CR-V Small Crossover/SUV 6.3% $40,525
Nissan Rogue Small Crossover/SUV 3.9% $36,028
Ford Escape Small Crossover/SUV 3.6% $36,744
Subaru CrossTrek/XV Small Crossover/SUV 3.4% $31,290*
Hyundai Tucson Small Crossover/SUV 3.0% $36,449
Mazda CX-5 Small Crossover/SUV 2.9% $34,645
Hyundai Kona Small Crossover/SUV 2.7% $30,199
Volkswagen Tiguan Small Crossover/SUV 2.5% $36,595*
Kia Seltos Small Crossover/SUV 2.4% $29,545
Volkswagen Taos Small Crossover/SUV 2.4% $33,895
GMC Terrain Small Crossover/SUV 2.3% $36,945*
Kia Sportage Small Crossover/SUV 2.2% $34,345
Ford Bronco Sport Small Crossover/SUV 2.2% $40,690
Chevrolet Trax Small Crossover/SUV 2.0% $26,199
Nissan Kicks Small Crossover/SUV 2.0% $31,229
Chevrolet Equinox Small Crossover/SUV 2.0% $36,899
Toyota Corolla Cross Small Crossover/SUV 2.0% $30,980
Subaru Forester Small Crossover/SUV 1.9% $35,790
Honda HR-V Small Crossover/SUV 1.7% $33,810
Tesla Model Y Battery Electric/Plug-in Hybrid 2.6% $56,120*
Tesla Model 3 Battery Electric/Plug-in Hybrid 2.3% $52,120*
Volkswagen ID.4 Battery Electric/Plug-in Hybrid 1.3% $50,595*
Hyundai IONIQ 5 Battery Electric/Plug-in Hybrid 1.2% $56,949*
Hyundai Kona EV Battery Electric/Plug-in Hybrid 1.1% $48,449
Mitsubishi Outlander PHEV Battery Electric/Plug-in Hybrid 1.1% $50,498
Ford Mustang Mach E Battery Electric/Plug-in Hybrid 0.9% $57,590*
Kia EV6 Battery Electric/Plug-in Hybrid 0.8% $58,145*
Toyota bZ4X Battery Electric/Plug-in Hybrid 0.7% $51,920*
Toyota Prius Prime Battery Electric/Plug-in Hybrid 0.5% $41,410*
Volkswagen Atlas Medium Crossover/SUV 1.7% $53,145
Jeep Wrangler Medium Crossover/SUV 1.7% $57,185
Jeep Grand Cherokee Medium Crossover/SUV 1.5% $60,465
Hyundai Santa Fe Medium Crossover/SUV 1.3% $49,999
Mazda CX-50 Medium Crossover/SUV 1.2% $42,045
Ford Explorer Medium Crossover/SUV 1.1% $52,730
Ford Bronco Medium Crossover/SUV 1.1% $52,410*
Toyota Highlander Medium Crossover/SUV 1.0% $51,580
Dodge Durango Medium Crossover/SUV 0.8% $62,190
Nissan Pathfinder Medium Crossover/SUV 0.8% $49,228

* Note: The current study used 2024 model-year pricing for vehicles for which prices were not yet available for 2025 model-year. All prices are given before applicable taxes.

        • Following are two pie-charts showing the weight of each class as well as that of each brand name, for all vehicles studied, relative to their respective Canadian sales:

Distribution of vehicles studied by class for Provinces

Vehicle Class Distribution
Battery Electric/Plug-in Hybrid 12.5%
Compact 14.9%
Medium Crossover/SUV 12.2%
Small Crossover/SUV 60.4%

 

Distribution of vehicles studied by brand name

Brand Name Distribution
Chevrolet 4.0%
Dodge 0.8%
Ford 8.9%
GMC 2.3%
Honda 11.4%
Hyundai 11.5%
Jeep 3.2%
Kia 7.0%
Mazda 5.3%
Mitsubishi 1.1%
Nissan 7.9%
Subaru 5.7%
Tesla 4.9%
Toyota 16.4%
Volkswagen 9.6%
        • For the three Territories, a different sample of vehicles was studied to account for their particularities, as described in Section 6: Operational Costs in the Territories.
        • All costs have been calculated separately for:
          • Each Province or Territory
          • Each vehicle studied
          • Each cost component (fixed and variable expenses)

3.3 Data Sources

The present study used information available in the public domain, data from previous studies that we have performed, as well as new research and consultations with specialized professionals and agencies. For each element studied we confirmed the accuracy of the data by consulting additional data sources and cross-referencing the findings. All data sources were assessed for reliability and were thoroughly documented.

3.4 Use of Weighted Averages

In order to accurately reflect current market conditions, consistent with the methodology employed in the previous year’s report, the present study follows a weighted average approach instead of a simple average, by employing weighted arithmetic means where relevant. This was deemed necessary because not all elements calculated contribute the same amount to the total. For example, according to the most recent information available from Statistics Canada, in Ontario there were approximately 84 times as many vehicles registered than in Prince Edward Island, and thus the two regions contribute significantly different amounts to the overall Canadian average. This method was employed throughout the study to better reflect the reality of the Canadian market.

In the same manner, certain vehicle models sell significantly more units on the Canadian market than others and therefore contribute more to the overall weighted average. For example, the Honda Civic sells considerably more units in Canada than the Mazda 3, close to three times the amount, and therefore the operating costs for the Honda Civic should reflect proportionately in the total calculated weighted average for each component of the cost. See Section 3.2: Vehicle selection for details.

4. Fixed Expenses Analysis

4.1 Ownership Costs

4.1.1 Current model-year vehicle prices

4.1.1.1 Vehicle pricing

For each vehicle under study, we have extracted 2025 model year MSRP (Manufacturer Suggested Retail Price) values. The main tool employed was AutoQuote, the industry-leading software that provides up-to-date detailed pricing for all new vehicles available on the Canadian market. At the time of the current study, pricing was not yet available for 14 vehicle models out of a total of 55. For these, 2024 model-year values were used, as in our experience these values vary only slightly from year to year and are generally reflective of 2025 values.

MSRP pricing is established by the manufacturers for the whole model year and is valid across Canada. Values extracted from AutoQuote were also cross-checked against the information published by vehicle manufacturers. On average, MSRP prices for vehicles studied increased by approximately 1.7% as compared to the previous year.

4.1.1.2 Prevalent manufacturer rebates

Vehicle manufacturers offer retail rebates for new vehicles in order to promote sales and distinguish themselves from their competition. We have thus performed substantial research to determine prevalent retail rebates for all vehicles studied. A period of one year was used as retail rebates vary from month to month as well as display variation, primarily by vehicle model and type of acquisition (cash, finance or lease).

All the data obtained was integrated into a 2,145 data-points matrix and subsequently reflected in the purchase price of each vehicle by Province and Territory and by the type of acquisition. Direct price negotiation between vehicle retailers and buying individuals could not be accounted for in this study.

Slowly rebounding from the recent trend of manufacturers rarely offering rebates on new vehicles mainly due to the strong demand and continued limited supply, manufacturers started again to offer limited rebates on some new vehicles. This primarily occurred during the last 12-month period in the Medium Crossover/SUV and Truck categories, with sporadic rebates offered for smaller vehicles. The average for the period was $316, a slight increase from $85 last year, but still considerably below the rebates of five years ago when the average was close to $1,100.  

4.1.1.3 Federal and provincial levies

Provincial and federal levies apply to the purchase of new vehicles and are intended in principle to offset environmental costs such as disposal and recycling of air conditioning fluids or tires. For the vehicles under study the following levies apply:

All applicable fees and levies have been factored in the analysis.

4.1.1.4 Provincial and federal rebates for electric vehicles

Seven Canadian Provinces (British Columbia, Manitoba, Quebec, Nova Scotia, New Brunswick, Newfoundland and Labrador and Prince Edward Island), as well as the Yukon Territory currently offer government-funded rebates for the acquisition of a Battery Electric (BEV) or Plug-in Hybrid Electric vehicle (PHEV). Rebates offered by Provinces and Territories range between $1,500 and $7,000 per vehicle.

Additionally, the Federal Government offers its own electric vehicle incentive, applicable across Canada. Battery Electric (BEV) as well as Plug-in Hybrid Electric vehicles (PHEV) with a range equal to or greater than 50 km are eligible for a rebate of $5,000. Plug-in Hybrid Electric vehicles (PHEV) with a shorter range are eligible for a $2,500 rebate. It is worth mentioning, however, that the Government of Canada adjusted the eligibility for the federal rebate to apply only to the specified BEVs and PHEVs manufactured in countries that have a free-trade agreement with Canada, starting on October 1st, 2024. Going forward, these vehicles manufactured in a country that does not have a free-trade agreement with Canada will no longer be eligible. This change will be studied and factored into next year’s report, if applicable.

Where applicable, federal and provincial rebates vary by a number of factors, such as battery capacity or driving range, vehicle size and MSRP cost. All these particular variations were integrated in the study accordingly.

For reference, the following table lists all currently applicable federal and provincial electric vehicle rebates, by type:

  Area of application
Type FEDERAL BC MB QC NS NB NL PE YT
Battery Electric Vehicles (BEV) $5,000 $4,000 $4,000 $7,000 $3,000 $5,000 $2,500 $5,000 $5,000
Long-range Plug-in Hybrid Electric (PHEV)* $5,000 $4,000 $4,000 $5,000 $3,000 $5,000 $1,500 $2,500 $5,000
Plug-in Hybrid Electric (PHEV) $2,500 $2,000 $2,500 $2,000 $2,500 $3,000

* Definition of a “Long-range PHEV” varies by program, e.g. the Federal Government as well as Nova Scotia, New Brunswick and the Yukon have a range requirement of 50 kilometres or more, British Columbia requires 85 kilometres or more, while Quebec has battery capacity requirements instead. Manitoba, Newfoundland and Labrador and Prince Edward Island have no distinctions between Long-range and Regular PHEVs.

4.1.2 Method of vehicle acquisition

We have performed research on the Canadian market to establish which methods of vehicle acquisition are the most prevalent as well as what market share is held by each.  It has been observed that due to the gradual reintroduction of the manufacturer rebates and subvented interest rates, there has been a shift away from financing and towards leasing. Cash purchases remain unchanged. Information provided by the Canadian Finance and Leasing Association in the Canadian Market Overview 2024 is used in the study and supported by other industry publications. Consequently, in Canada, the new vehicle market is currently distributed among the following three forms of acquisition as follows:

Therefore, in order to accurately reflect the reality of the market, we have analyzed all three forms of acquisition and subsequently calculated a weighted average for each vehicle under study according to their proportion of the market.

The net cost of vehicle ownership was calculated according to the method of acquisition (cash, financing or leasing). All three vehicle acquisition methods were addressed with their specific particularities, proportionately with their prevalence in the Canadian automotive landscape, as follows:

4.1.3 Four- and five-year retention periods

We calculated ownership costs for both four- and five-year retention periods, terms that were found to be reflective of average retention periods for the Canadian automotive landscape. All calculations were performed by vehicle and per Province or Territory taking into account both retention periods and the results were averaged to yield one value per vehicle, by Province or Territory.

4.1.4 Vehicles driven 20,000 kilometres annually

All vehicles under study were considered to be driven 20,000 km per year. This is deemed to be a reasonable benchmark to base all reimbursement calculations on since the average Canadian vehicle is driven between 16,000 and 24,000 km per year. All calculations were made using this benchmark all across Canada.

4.1.5 Financing and leasing interest rates

We have performed in-depth research to determine the prevalent interest rates provided by vehicle manufacturers. The manufacturers offer what are known as subvented rates to promote sales of new vehicles. These rates are typically substantially lower than regular financial institutions’ loans. Since these reduced rates are prevalent on the market, we deemed it reflective of reality to integrate these rates into our calculations.

Interest rates vary considerably by:

All these variations were integrated into a 2,860 data-points matrix and subsequently reflected in the ownership costs of each vehicle, by Province and Territory.

For the current study, all vehicle models studied had manufacturer-established interest rates available for four- and five-year financing. However, while all the manufacturers studied offered subvented leasing rates, some did not offer them for certain models on four- and five-year leasing terms. In these instances, average market (financial institutions or third-party leasing companies) rates were used.

All interest rates (financing and leasing) varied from 1.58% to 9.56% for manufacturers’ subvented rates, while the third-party interest rates were approximated at 10.00%. The average interest rate for financing contracts was 5.13% (down from 5.65% the previous year), while the lease rate was 7.58% (down from 7.74% last year). Overall, interest rates are lower as compared to the previous year.

4.1.6 Sales taxes

Federal and provincial sales taxes (GST, PST, QST, HST) apply to the full cost of a new vehicle according to the taxation method of each Province or Territory. Sales taxes also apply to:

Whether a vehicle is cash-purchased, financed or leased, taxes apply differently. For both cash purchases and financing contracts, the full price of a new vehicle is subject to sales tax, whereas for leased vehicles sales tax is only applied to monthly lease payments (including tax on interest).

Sales taxes have been factored into all calculations as to accurately reflect the direct costs to the end user of a vehicle. Following is a table listing the combined GST/PST/QST/HST applicable for each Province and Territory for the period relevant to the current study:

Sales taxes in Canada by Province and Territory Combined sales taxes
Alberta 5%
British Columbia 12%
Manitoba 12%
New Brunswick 15%
Newfoundland and Labrador 15%
Northwest Territories 5%
Nova Scotia 15%
Nunavut 5%
Ontario 13%
Prince Edward Island 15%
Quebec 14.975%
Saskatchewan 11%
Yukon 5%

 

4.1.6.1 Taxes on fuel

Fuel prices listed at the pump have all taxes included, as is the standard throughout Canada. Fuel is usually taxed federally, provincially as well as regionally. Approximately a third of the price paid at the pump is made up of the following:

All fuel prices given in the present study have all taxes included.

4.1.6.2 Taxes on insurance premiums

Regular sales tax (GST/PST/QST/HST) as well as additional insurance-specific taxes apply differently to insurance premiums across Canada depending on each Province or Territory. Insurance premiums given in the present study account for all applicable taxes.

4.1.6.3 Recent and upcoming tax rate changes

We have consulted directly with all relevant public sources in order to determine if there are any impending tax rate changes across Canada in the near future. At this time, no changes in sales taxes are recorded anywhere in Canada. However, it is worth noting that the government of Nova Scotia recently announced that they are planning to reduce the provincial portion of the sales tax by 1%, effective April 1st, 2025. If this reduction applies as planned, it will be factored into the May 2025 Fuel Update report.

For each subsequent Fuel Update of the present study, research will be performed again for all Canadian Provinces and Territories to determine if tax amounts have changed or if any changes are foreseen in the future.

4.1.7 Resale values (vehicle remarketing)

In order to accurately assess total costs of vehicle ownership, an analysis was performed for each vehicle under study, to project resale values for retention periods of four and five years. Resale values were extracted from resale market data for the same or a similar vehicle model. The research was based on:

The values were extracted from the Canadian Black Book, an industry standard for establishing values for used cars and were supported through consultation with specialized vehicle resellers, as well as employing other relevant tools. Final values were projected for:

Resale values were integrated into the depreciation analysis differently depending on the type of acquisition, as follows:

On average, vehicle resale values decreased by approximately 8.7%, which resulted from the direct impact of balancing the supply and demand, as the disruptions caused by the COVID-19 pandemic normalized. The supply disruptions had caused a shortage of new vehicles, resulting in a significant increase in demand for pre-owned ones, pushing the prices up considerably. With the return of the normal supply of new vehicles, the demand for used vehicles has dropped significantly, leading to an overall decline in resale prices. This trend has been observed across all vehicle classes.

4.1.8 Total cost of ownership calculations

For each Province and Territory, total costs of ownership were calculated for:

A weighted average was then calculated for all vehicles under study to yield a final cost-of-ownership figure per Province and Territory. All figures were converted and expressed in dollars per kilometre.

The following three tables give a detailed break-down of vehicle ownership costs in Canada in dollars per kilometre, by vehicle class, four- and five-year retention periods, split by depreciation costs, financing costs (interest) and sales taxes, as well as a weighted average according to vehicle sales figures:

DEPRECIATION

($/km)

 Compact Small Crossover/SUV Medium Crossover/SUV Battery Electric/Plug-in Hybrid WEIGHTED AVERAGE
4-yr ownership $0.124 $0.172 $0.278 $0.208 $0.182
5-yr ownership $0.124 $0.161 $0.257 $0.199 $0.172
          $0.177

---

INTEREST

($/km)

 Compact Small Crossover/SUV Medium Crossover/SUV Battery Electric/Plug-in Hybrid WEIGHTED AVERAGE
4-yr ownership $0.028 $0.034 $0.059 $0.055 $0.039
5-yr ownership $0.033 $0.039 $0.070 $0.063 $0.045
          $0.042

---

ACQUISITION SALES TAX
($/km)		 Compact Small Crossover/SUV Medium Crossover/SUV Battery Electric/Plug-in Hybrid WEIGHTED AVERAGE
4-yr ownership $0.042 $0.050 $0.074 $0.063 $0.053
5-yr ownership $0.035 $0.041 $0.062 $0.053 $0.044
          $0.049

* Note: total weighted averages are rounded to 3 decimals.

4.1.9 Costs of ownership changes from the previous year

A general trend of increased MSRP prices, low manufacturer rebates, as well as a substantial decrease in both resale prices and residual value led to an overall increase in total ownership costs. This was only minimally counterbalanced by decreased interest rates. The overall result was that, across Canada, total average ownership costs increased by approximately 12.6% over last year, which is quite significant. The variation in costs of ownership between Provinces and Territories was minimal.

4.2 Vehicle Registration and Licensing Costs

Vehicle registration, licensing and plating is regulated at the provincial level. Each Canadian Province and Territory has its own regulatory body governing the rules and costs of vehicle licensing. Registration costs are typically charged annually in the form of a registration renewal. In some Provinces there are certain one-time up-front costs that are charged only at the time of the initial vehicle registration.

We have performed a complete study of these costs by contacting all provincial and territorial authorities. Registration costs do not have additional taxes applied to them as payment is made directly to the respective governmental agencies. The terms registration and licensing are used interchangeably in this study.

Registration costs vary by:

All these costs have been integrated into the calculations for each Province and Territory. Annual registration costs vary between $0 in Ontario and $270 in Quebec and contribute a weighted average of $0.005 per kilometre for all of Canada.

The following table lists annual registration costs used in the study for all ten Provinces and three Territories:

Province/Territory Annual registration costs Registration costs in $/km
Alberta $93 $0.005
British Columbia $61 $0.003
Manitoba $126 $0.006
New Brunswick $165 $0.008
Newfoundland and Labrador $90 $0.005
Northwest Territories $83 $0.004
Nova Scotia $125 $0.006
Nunavut $60 $0.003
Ontario $0 $0.000
Prince Edward Island $130 $0.007
Quebec $270 $0.013
Saskatchewan $68 $0.003
Yukon $54 $0.003

 

4.2.1 Note on the Province of Quebec

It must be noted that in Quebec, provincially regulated bodily injury insurance must be purchased through the annual vehicle registration process. This is the reason why registration costs in Quebec are generally higher than the other Provinces or Territories.

4.3 Vehicle Insurance Costs

4.3.1 Regulation of vehicle insurance

Insurance rates vary greatly across Canada, primarily due to different provincial laws determining vehicle accident fault, subrogation or no-fault policies. Vehicle insurance is offered by private insurers in Alberta, Ontario as well as the four Atlantic Provinces and the three Territories. Quebec, however, has a hybrid system where bodily injury insurance is provided by the Province through its vehicle registration process, while third-party liability is provided by private insurers. On the other hand, the Provinces of British Columbia, Manitoba and Saskatchewan have mandatory public vehicle insurance, offered exclusively by the provincial governmental bodies.

4.3.2 Variability of insurance premiums

Insurance premium rates vary considerably not only from Province to Province, but also according to a substantial number of other parameters related to the insured driver’s personal characteristics as well as to the vehicle being insured. Where insurance is offered privately, insurance premiums also vary considerably from one insurer to another.

4.3.3 Analysis of prevalent insurance premiums

We have performed a thorough analysis on current prevalent insurance premium rates for the average government employee to keep these figures in line with current market conditions as well as recent industry publications. The steps taken to determine the insurance rates used in the present study were as follow:

  1. The latest information on the average insurance premiums paid in each Province and Territory were collected from the General Insurance Statistical Agency (GISA), Groupement des assureurs automobiles (GAA), Insurance Corporation of British Columbia (ICBC), Manitoba Public Insurance (MPI) and Saskatchewan Government Insurance (SGI) to form an industry baseline for each Canadian Province and Territory. The inflation rate on vehicle insurance premiums posted by Statistics Canada was also applied in the calculations.
  2. Provided the specifics of the present study and the demographics of the average government employee, an allowable variability factor was added to the industry baseline premiums to establish the prevalent insurance rates to be used in the study. The variability factor accounts for the following:
    1. The differences between the average driver/vehicle in Canada versus the average government employee, as well as the selection of vehicles in the study,
    2. Any potentially applicable discounts that an average Canadian driver might be able to obtain (e.g. discounts when combining car and home insurance, discounts based on credit score), that this study was unable to directly account for.
  3. The calculated rates were then substantiated through quotes obtained based on the average government employeeas described in Section 3.1. We requested over 150 quotes based on this established demographic directly from private insurers as well as insurance brokers. For Provinces with public insurance the data available from the governing bodies was used.

Following is a table listing average insurance premiums for the ten Provinces and three Territories as well as a comparison with the insurance premiums published in the previous year study, for direct comparison (averaged annual premiums have been rounded up to the nearest $25):

Province/Territory Current insurance premiums Insurance costs in $/km January 1st, 2024, Annual Report insurance premiums
Alberta $2,250 $0.113 $2,150
British Columbia $1,525 $0.076 $1,525
Manitoba $1,450 $0.073 $1,550
New Brunswick $1,525 $0.076 $1,475
Newfoundland and Labrador $1,775 $0.089 $1,700
Northwest Territories $1,825 $0.091 $1,775
Nova Scotia $1,625 $0.081 $1,525
Nunavut $1,800 $0.090 $1,775
Ontario $2,350 $0.118 $2,225
Prince Edward Island $1,275 $0.064 $1,250
Quebec $1,300 $0.065 $1,150
Saskatchewan $1,350 $0.068 $1,575
Yukon $1,525 $0.076 $1,475

The values obtained through the present study are deemed to be reflective of the current reality for the established demographic. Insurance rates vary between $1,150 and $2,225, with a Canadian weighted average of $0.089 per kilometre.

The largest increase of insurance premiums has been observed in the three Provinces with public vehicle insurance, i.e. British Columbia, Manitoba and Saskatchewan. Due to the fact that these Provinces offered discounts during the COVID-19 pandemic that were not offered by private insurers in other Provinces, they now seem to rebalance their rates to better align with the rest of the country.

5. Variable Expenses Analysis

5.1 Fuel Expenses

Fuel expenses are directly related to three main factors: buying location, fuel consumption of the vehicle and time of the year. The current study focuses on gasoline prices across Canada, which are strongly related to variations in the world energy market.

This report aims to provide an overview of the current market situation and present the latest estimates and forecasts pertinent to the energy market conditions. Nevertheless, similar to the previous reports, caution must be exercised when considering the data available due to the rapidly changing nature of global markets.

5.1.1 Energy market context

Over the last three months, the volatility of global oil prices has increased amid concerns regarding weakening global demand and rising supply. Oil prices saw two peaks during this period while, on average, exhibiting a decline. On August 25th, 2024, West Texas Intermediate (WTI) closed at $77.42, and Brent closed at $81.43. This was followed by a rapid price decline, and the period’s lowest price was recorded on September 9th, when WTI closed at $65.75 and Brent closed at $69.19, a drop of 15.1% for both benchmarks. Prices rebounded in early October driven by the escalation of the conflict in the Middle East. On October 6th the WTI was at $77.14 and Brent at $80.93. As of November 15th, the WTI stood at about $67 per barrel and Brent at $71.

Gas prices, on average, exhibited less volatility than oil, declining in August and September and exhibiting a limited peak in mid-October before receding again. As a result, the Canadian average price for gasoline in the three-month period was $1.554 per litre as compared to $1.675 during the summer months, a decline of 7.2%. From a yearly perspective, the average price was 5.6% lower than a year ago when the cost per litre was $1.646.

5.1.1.1 Global crude oil demand

According to the International Monetary Fund’s (IMF) World Economic Outlook (WEO) published in October 2024, global economic dynamics are marked by a notable decline in inflation alongside a steady yet restrained growth outlook. After reaching a peak of 9.4% year-over-year in late 2022, driven by the widespread supply chain disruptions combined with high demand after the COVID-19 pandemic and intensified by a sharp rise in commodity prices triggered by the war in Ukraine, global inflation is projected to fall to 3.5% by 2025. For comparison, the average inflation between 2000 and 2019 was 3.6% per year. As these disruptions have largely resolved, inflation, aided by tight monetary policies, has dropped without any significant economic slowdowns. The present global economic outlook remains largely unchanged since April 2024, with the global growth rate projected at 3.2% for 2024 and 2025.

The outlook for Advanced Economies indicates a phase of modest and consistent growth after the reopening boost of 6.0% in 2021 and 2.9% in 2022. Growth rates are expected to fluctuate between 1.7% and 1.8% through 2029, showing signs of stabilization as these economies approach their potential output levels – the highest level of real Gross Domestic Product (GDP) that can be sustained over the long term. However, this overall stability masks different trends across regions as notable revisions have taken place beneath the surface, with upgrades to the forecast for the United States (U.S.) offsetting downgrades to other Advanced Economies, particularly in Europe.

In the U.S., the growth forecast for 2024 has been adjusted upward to 2.8%, which is 0.2 percentage points higher than the July estimate. This increase is driven by stronger-than-expected consumer spending and non-residential investment. The resilience in spending is primarily supported by notable real wage gains, especially for lower-income households. However, growth is expected to slow to 2.2% (up from 1.9% in the July report) next year as tighter fiscal policy and a cooling labour market reduce consumer spending. 

The Euro Zone will likely experience a gradual growth recovery, with an expected increase of 0.8% in 2024 driven by improving exports. Growth is projected to reach 1.2% in 2025 as rising real wages boost consumer spending and supportive monetary policies encourage investment. Nevertheless, Europe’s largest economy, Germany, is facing manufacturing struggles while dealing with budget cuts and falling real estate prices. As a result, the German economy is projected to see no expansion this year before returning to a modest 0.8% growth rate in 2025.

Canada appears to have been successful in controlling inflation, which is now around 2% – right in the middle of the Bank of Canada’s target range of 1% to 3%. Inflation fell from 2.7% in June to 1.6% in September, primarily due to lower energy prices. As compared to the July forecast, the Bank of Canada is reporting stronger economic growth in the second quarter of this year while the third quarter seems to be weaker than previously projected, reflecting slower growth in both business investment and government spending. Overall, the Canadian economy expanded by about 2.0% in the first half of the year and the available data suggest a slightly slower pace of growth – about 1.5% – in the third quarter. Similar to the previous report, Gross Domestic Product (GDP) per person continues to decline. The Bank expects that the economic growth will pick up gradually, averaging 2.3% over 2025 and 2026. Consumer spending and business investment are anticipated to strengthen, supported by decreases in interest rates. Similarly, the IMF estimates that Canada’s economic expansion will stand at 1.3% in 2024 and 2.4% in 2025, remaining unchanged since the last IMF report in July 2024.

The growth forecast for Emerging Markets and Developing Economies is steady, with projections at around 4.2% over the next two years. While these economies share a generally stable outlook, similar to Advanced Economies, regional variations persist. Disruptions to production and shipping of commodities (especially oil) due to conflicts, civil unrest, and extreme weather events have led to downward revisions to the outlook for the Middle East and Central Asia and for sub-Saharan Africa. These have been compensated by upgrades to the forecast for Emerging Asia (China, India, Indonesia, Malaysia, the Philippines, Thailand, and Vietnam), where surging demand for semiconductors and electronics, driven by significant investments in artificial intelligence, has bolstered growth. In Emerging Asia, growth is expected to moderate from 5.7% last year to 5.0% in 2025 as China and India experience slower expansion. India’s growth is projected to slow from 8.2% in 2023 to 6.5% by 2025 as pandemic-driven demand subsides. On the other hand, China faces a gradual slowdown due to its persistent real estate sector challenges. Still, China’s growth is expected to dip only slightly from 5.2% last year to 4.8% this year, primarily backed by stronger-than-anticipated net exports, with the forecast, compared to April, revised upward by 0.2 percentage points. The growth rate for 2025 has seen an even more significant improvement of 0.4 percentage points (as compared to the April 2025 IMF report) yet remaining at 4.5%. In September, China announced its largest economic stimulus since the COVID-19 pandemic, which may further boost short-term growth. On the downside, a more profound or prolonged contraction in China’s property sector, mainly if it affects financial stability, could dampen consumer confidence and have negative spillovers globally, given China’s significant role in international trade.

While the global decline in inflation is a major milestone, downside risks are rising and now dominate the outlook. These include an escalation in regional conflicts, monetary policy remaining tight for too long, a possible resurgence of financial market volatility with adverse effects on sovereign debt markets, a deeper growth slowdown in China and the continued rise of protectionist policies.

Similar to the previous reports, forecasts for the global oil demand in 2024 and 2025 show an unusually wide range, primarily due to differing views on China’s economic outlook as well as the speed of the global transition to cleaner energy sources. On the one hand, according to the Monthly Oil Market Report (MOMR) from November 2024, the Organization of the Petroleum Exporting Countries (OPEC) projects that global oil demand will reach 104.0 million barrels per day (mb/d) this year, a downward revision of 0.3 mb/d as compared to the August report, but still a strong increase of 1.8 mb/d over 2023.  A further 1.6 mb/d increase is forecast for 2025, averaging 105.6 mb/d. On the other hand, the U.S. Energy Information Administration’s (EIA) projections are more conservative at 103.1 mb/d in 2024, an increase of 1.0 mb/d over last year’s average. In 2025 the demand is projected to average 104.4 mb/d. Even more conservatively, the International Energy Agency (IEA) forecasts an increase of just below 1.0 mb/d in 2024 and 2025, due to subpar economic growth, greater efficiencies and vehicle electrification that could reduce gasoline and diesel consumption, projected to average 102.8 mb/d and 103.8 mb/d respectively.

5.1.1.2 Global crude oil supply

Over the last couple of years, a significant shift has taken place in the energy markets. About two years ago, when Russia began the invasion of Ukraine, the main concern was supply – would there be enough oil to meet the demand? Right now, as the supply remains robust, the demand has weakened, and this has led to concerns about a global oversupply that could push energy prices down further.

While the OPEC+ coalition continues to limit the global crude oil supply in attempts to keep the prices up, these efforts are more than offset by the production increases by the non-OPEC+ countries – the United States, Canada, Brazil and Guyana in particular. The International Energy Agency (IEA) projects that even if the OPEC+ cuts remain unchanged, global supply will exceed demand by more than 1.0 million barrels per day (mb/d) in the next year. However, the IEA also notes that because the supply risks remain omnipresent, some oversupply could “provide some much-needed stability to a market upended by the COVID-19 pandemic, Russia’s full-scale invasion of Ukraine and, most recently, heightened unrest in the Middle East.” By comparison, the U.S. Energy Information Administration (EIA) projects a smaller oversupply of 0.3 mb/d in 2025. The U.S. EIA supply projections stand at 102.6 mb/d in 2024 and 104.7 mb/j in 2025.

The U.S. is continuing to increase crude oil production, which is projected to average 13.2 mb/d this year, an increase of 2.3% as compared to 2023. In mid-October, the U.S. EIA reported a record production of 13.5 mb/d. Despite the rising production, the U.S. crude oil inventories are 5% below the five-year average, thus providing support to crude prices. As the production increases, the U.S. has continued to develop its infrastructure with three new oil pipeline projects completed since 2023. These projects include the South Bend (150,000 barrels per day – b/d) from North Dakota to Montana, the Keystone Port Neches Link (630,000 b/d) in Texas, and the Borger Express (90,000 b/d) from Oklahoma to Texas.

In the summer of 2024, the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, together known as OPEC+, announced plans to begin unwinding the voluntary production cuts starting October 2024.  The plan was to gradually phase out the 2.2 mb/d production cuts over the course of a year while keeping the mandatory output reduction of 3.7 mb/d until the end of 2025. However, because of the bearish global economic outlook, OPEC+ has postponed the planned production increases until at least January 2025.

Geopolitics continue to play a significant role in the global energy markets, particularly when it comes to increasing price volatility. The conflict in the Middle East has continued to be a major contributor to the crude oil market movements. In late September and early October, the conflict was escalating with Israel launching airstrikes on Hezbollah sites in Lebanon. In addition, Israel also retaliated against Iran with both countries launching missiles towards one another. All these developments heightened concerns about potential regional supply disruptions if key oil infrastructure sites were to be targeted. As a result, oil prices saw a rapid hike with the Brent and WTI rising over 3% in a single day, contributing to the price rally that peaked in early October. 

This year’s Atlantic hurricane season, officially running from June 1st to November 30th, has been very active, producing eleven hurricanes so far, with five reaching major hurricane strength and heavily impacting the U.S. energy sector. Three back-to-back storms – hurricanes Helene, Francine, and Milton – caused significant disruptions to oil and gasoline production and led to tightness in the gasoline market, temporarily tempering the decline of gas prices in the U.S. and Canada. Hurricane Francine made landfall on September 11th and forced port closures and the evacuation of workers from Gulf of Mexico oil platforms, leading to a temporary shutdown of 42% of offshore oil production in the Gulf, equaling about 15% of the U.S. output. This pushed crude oil prices up by $1-$2 per barrel. Key facilities like the Louisiana Offshore Oil Port and nearby refineries were also affected, with Louisiana's largest refinery, which is the sixth largest in the U.S., reducing refining capacity to around 20% in preparation for the storm.  A couple of weeks later, in the Gulf of Mexico, hurricane Helene made landfall on September 26th near Perry, Florida, as a Category 4 storm, leading to another temporary shutdown of nearly 30% of crude oil production in the Gulf of Mexico. As the third storm – Milton – approached, the market saw a rise in gasoline demand, in large part fueled by consumer panic-buying in anticipation of the storm. With supplies tight in affected areas like Florida and Georgia, the combined impact of these hurricanes put more pressure on gas prices and placed substantial strain on oil supply chains, refinery operations, and gasoline supplies, temporarily offsetting some of the downward pressures by the global crude oil prices.

5.1.2 Gasoline prices across Canada

In line with crude oil price trends, gasoline prices in Canada have seen a decline both as compared to the previous three-month period as well as to a year ago. In late August, which is the tail end of the summer driving season, the price of gasoline in the U.S. was 13.0% lower than at the same time last year, while the Canadian average price for gasoline was nearly 8.5% lower. Overall, the data suggests that in the U.S. the demand for gasoline this year has still been about 0.1 mb/d higher than last year, possibly in part due to the panic buying in anticipation of the hurricanes in September and October that led to increased demand and subsequent price spikes in the affected regions, spilling over to Canada as well.  Nevertheless, these events had only a moderate impact on the price of gasoline in North America as the crude oil fundamentals – weakening demand and rising supply – remained unchanged, pushing prices down.

As a result, the daily average price for gasoline in Canada varied from $1.678 on August 14th to $1.499 on October 1st, 2024. The three-month average gas prices declined across Canada. Provinces saw a decline from 3.6% in Saskatchewan to 9.3% in Nova Scotia, with most Provinces declining between 6.0% and 9.0%. Due to their supply particularities that usually lead to delayed price adjustments, Territories saw smaller declines of 0.3% in Nunavut, 0.6% in the Northwest Territories and 1.9% in the Yukon.

Prices of gasoline, in Canada, include all applicable taxes. Prices vary significantly across the country, mainly due to the difference in the types and amounts of taxes being charged on fuel in different Provinces and Territories. According to Natural Resources Canada, the vast majority of light-duty vehicles on Canadian roads run on gasoline. We have therefore researched the average prices of regular gasoline charged at the pump. The fuel price data was primarily obtained from Natural Resources Canada via Kalibrate (previously Kent Marketing), based on daily published fuel prices for 78 locations across Canada. This data was verified against additional databases that similarly track fuel prices all across Canada.

Consistent with the methodology of the previous study, when determining average gasoline prices per Province or Territory, we have used a weighted average according to population in order to better conform to reality. In this manner, metropolitan population centers account for a greater portion of the total than smaller municipalities. Prices were tracked daily across Canada (except for Saturdays, Sundays and holidays).

Fuel price data was extracted for a period of three months (August 12th to November 8th, 2024) in order to better reflect current prices. Gasoline prices in Canada varied during this period between $1.217 in Brandon, MB to $1.899 in Whitehorse, YT, with a national average of $1.554.

The following is a table with three-month average regular gasoline prices for all Canadian Provinces and Territories, in dollars per litre, as well as gasoline prices from previous reports, for comparison:

Province/Territory Current average fuel price ($/litre) Current average fuel cost ($/km) October 1st, 2024, Fuel Update ($/litre) July 1st, 2024, Fuel Update ($/litre) April 1st, 2024, Fuel Update ($/litre) January 1st, 2024, Annual Report ($/litre)
Alberta $1.450 $0.113 $1.551 $1.481 $1.250 $1.405
British Columbia $1.723 $0.134 $1.838 $1.938 $1.688 $1.902
Manitoba $1.338 $0.104 $1.422 $1.366 $1.317 $1.597
New Brunswick $1.569 $0.122 $1.695 $1.698 $1.561 $1.754
Newfoundland and Labrador $1.671 $0.130 $1.802 $1.805 $1.643 $1.817
Northwest Territories $1.626 $0.183 $1.635 $1.596 $1.617 $1.678
Nova Scotia $1.576 $0.123 $1.738 $1.712 $1.568 $1.746
Nunavut $1.751 $0.198 $1.755 $1.740 $1.636 $1.535
Ontario $1.521 $0.119 $1.639 $1.593 $1.448 $1.590
Prince Edward Island $1.633 $0.127 $1.748 $1.701 $1.587 $1.750
Quebec $1.573 $0.123 $1.723 $1.712 $1.591 $1.726
Saskatchewan $1.515 $0.118 $1.571 $1.515 $1.361 $1.560
Yukon $1.862 $0.210 $1.899 $1.815 $1.773 $1.924

Gas prices in Nunavut are typically set for a full calendar year and rarely exhibit any changes. However, the Territory has been gradually bringing its gasoline prices more in line with the rest of Canada and the latest price update occurred on April 1st, 2024. The territorial average was thus determined to be $1.751 for the current study.

For illustration purposes, the following Graph displays gasoline prices for the main metropolitan areas for a one-year period (November 2023 – November 2024).

Also, for illustration purposes, the following Graph displays crude oil prices for three benchmarks – WTI (West Texas Intermediate), Brent and WCS (Western Canadian Select) for a one-year period (November 2023 – November 2024).

5.1.3 Fuel consumption

For each vehicle under study, fuel consumption figures were extracted from the industry’s vehicle pricing and specification standard tool, AutoQuote, backed up by Natural Resources Canada’s EnerGuide. For models where 2025 model year figures were not available, 2024 figures with similar engine sizes were used. Fuel consumption figures are determined by vehicle manufacturers based on standardized tests, and are published for both city driving and highway driving. For Battery-Electric and Plug-in Hybrid Electric vehicles, AutoQuote and the EnerGuide provides figures for fuel consumption by using a litre-equivalent (Le/100 km) system, thus facilitating the comparison with conventional fuel vehicles.

In Provinces where the majority of the population lives in large urban centres (e.g., Ontario) vehicles are driven more under city-driving conditions rather than highway-driving conditions. In light of this fact, the percentage of city versus highway driving has been referenced to a 55/45 city/highway split, consistent with the methodology used by EnerGuide. On the other hand, for the Territories, a reversed 30/70 city/highway split was factored in, due to the predominantly rural character of the Territories and long distances to be covered.

The following table gives average fuel consumption figures by class of vehicle, in litres of gasoline per hundred kilometres, as well as the weighted averages according to year-to-date vehicle sales:

COMBINED FUEL
CONSUMPTION
(l/100 km)		 Compact Small Crossover/SUV Medium Crossover/SUV Battery Electric/Plug-in Hybrid Pick-up Truck WEIGHTED
AVERAGE
Provinces 7.0 8.4 10.8 2.7 - 7.8
Territories - 8.0 10.2 - 11.4 9.4

 

5.1.4 Calculation of fuel expenses

Based on an average of 20,000 kilometres per year and following the methodology described above, the study calculated average fuel costs, per Province or Territory, for all vehicles under study. These numbers were weight-averaged according to population to yield individual fuel cost figures for each Province or Territory.

Fuel contributes on average $0.121 per kilometre to total operating costs, ranging from $0.104 in Manitoba to $0.210 in the Yukon.

5.2 Vehicle Maintenance Expenses

In order to keep a vehicle in proper running condition and respect all driving safety requirements, a vehicle must be adequately maintained. Vehicle maintenance includes the following:

5.2.1 Preventative maintenance

Preventative maintenance includes, but is not limited to, the following:

Costs of preventative maintenance were estimated based on consultation with specialized garages and qualified mechanics in order to determine the frequency and costs for parts and labour. Sales taxes apply to all preventative maintenance costs.

5.2.2 Projected costs of repairs not covered by manufacturer warranty

Since the current study is considering retention periods of four and five years, a certain cost for projected repairs must be taken into account. Repairs due to accidents are covered by insurance and are reflected in insurance premiums costs. Most manufacturers offer warranties of up to 3 years or 60,000 kilometres (with the exception of Kia, Hyundai, Mitsubishi, Volkswagen and Tesla, which offer longer warranties). Beyond this period or mileage, any mechanical system that breaks down will incur a direct cost to the owner. Repairs not covered by manufacturer warranty have been accounted for in the present study accordingly.

5.2.3 Tires

The various vehicles under study have different tire requirements, mostly due to different rim sizes. All new vehicles come with a set of standard all-seasons tires. However, if only one set of tires is used, they wear out and need to be replaced, on average, after 60,000 kilometres. This implies that at least one new set of tires must be purchased for both four- and five-year retention periods.

For the purpose of this study, average quality all-seasons tires were considered. Costs of tires vary between $1,020 and $1,940 for a set of four with installation included, mainly depending on the type and size, plus applicable taxes.

5.2.3.1 Adjustments for Quebec and British Columbia

The Province of Quebec mandates the use of winter tires for all light-duty vehicles, for the period between December 1st and March 15th. In order to reflect this requirement a 50% increase in the cost of tires was factored into the calculations. This accounts for purchasing an additional set of winter tires while offsetting the need to purchase another set of all-season tires for the four-year retention period studied but not necessarily for the five-year period.

Similarly, British Columbia mandates the use of winter tires on most highways and in mountainous areas between October 1st and April 30th. A 50% increase in the costs of winter tires was factored in the calculations to account for this requirement, in order to reflect the fact that winter tires are consistently used by vehicles registered in this Province.

5.2.4 Miscellaneous maintenance expenses

There are other common expenses related to maintaining a vehicle that do not fall under the previous three categories, but which are necessary for safety as well as aesthetic reasons. The present study allocated a $168 per year allowance for miscellaneous costs such as windshield washer fluid, occasional car wash and polish, light bulbs etc.

5.2.5 Total costs related to vehicle maintenance

Total maintenance costs were calculated for every Province and Territory. Costs are higher for Quebec and British Columbia mainly due to winter tire regulations. Costs for the three Territories are also higher primarily due to the extra equipment needed to support driving conditions in the North, as detailed in Section 6. Costs are lower for the Province of Alberta due to the fact that there is no provincial sales tax applicable.

The following five tables give a full break-down of vehicle maintenance costs in dollars per kilometre, by vehicle class as well as four- and five-year retention periods, split by preventative maintenance, repairs, tires, miscellaneous and maintenance sales tax, as well as weighted averages according to vehicle sales:

PREVENTATIVE MAINTENANCE ($/km) Compact Small Crossover/SUV Medium Crossover/SUV Battery Electric/Plug-in Hybrid WEIGHTED AVERAGE
4-yr ownership $0.058 $0.058 $0.060 $0.029 $0.055
5-yr ownership $0.064 $0.064 $0.067 $0.036 $0.061
          $0.058

----

REPAIRS ($/km) Compact Small Crossover/SUV Medium Crossover/SUV Battery Electric/Plug-in Hybrid WEIGHTED AVERAGE
4-yr ownership $0.017 $0.018 $0.019 $0.012 $0.017
5-yr ownership $0.028 $0.028 $0.029 $0.012 $0.026
          $0.022

---- -

TIRES ($/km) Compact Small Crossover/SUV Medium Crossover/SUV Battery Electric/Plug-in Hybrid WEIGHTED AVERAGE
4-yr ownership $0.015 $0.019 $0.028 $0.026 $0.021
5-yr ownership $0.012 $0.015 $0.022 $0.021 $0.016
          $0.018

-------

MISCELLANEOUS ($/km) Compact Small Crossover/SUV Medium Crossover/SUV Battery Electric/Plug-in Hybrid WEIGHTED AVERAGE
4-yr ownership $0.008 $0.008 $0.008 $0.008 $0.008
5-yr ownership $0.008 $0.008 $0.008 $0.008 $0.008
          $0.008

---- -

MAINTENANCE SALES TAX ($/km) Compact Small Crossover/SUV Medium Crossover/SUV Battery Electric/Plug-in Hybrid WEIGHTED AVERAGE
4-yr ownership $0.012 $0.013 $0.014 $0.009 $0.012
5-yr ownership $0.014 $0.014 $0.016 $0.010 $0.014
          $0.013

* Note that the total weighted averages are rounded to 3 decimals.

6. Operational Costs in the Territories

In order to accurately reflect the actual costs of operating vehicles in the three Canadian Territories, the analysis required a different approach than for the ten Provinces. The Territories are mostly rural and driving conditions are harsher, especially in the wintertime. This means that prevalently larger vehicles are used with winter-adapted equipment and therefore the costs for maintenance, tires, fuel and specialized equipment are higher.

This section describes the methodology used for the Territories as well as highlights where it differs from the methodology used for the ten Provinces.

6.1 Vehicle Selection for the Territories

The nature of the climate and road conditions in the three Territories is considerably different than for the ten Provinces. Due to this fact, as well as the harsh winter driving conditions that drivers face in the North, the automotive landscape has a different make-up, and as a result Trucks and Crossovers/SUVs are significantly favoured over Compact Sedans and Battery Electric/Plug-in Hybrid Electric Vehicles. Following this rationale, the present study selected three vehicle classes that were deemed representative of the Territories, the same as in the previous Annual Report (November 2023, for publication on January 1st, 2024):

The study kept the vehicles studied in the Small and Medium Crossover/SUVs categories, added the 5 most sold pick-up trucks in the Truck category and eliminated the Compact Sedan and Battery Electric/Plug-in Hybrid Electric Vehicle classes.

Following is a table listing the vehicles studied for the Territories, as well as the class they belong to, and the weight assigned to each according to recent Canadian sales:

Make Model Class Weight for Territories 2025 Model Year Pricing*
Toyota RAV4 Small Crossover/SUV 8.2% $35,080
Honda CR-V Small Crossover/SUV 5.7% $40,525
Nissan Rogue Small Crossover/SUV 3.5% $36,028
Ford Escape Small Crossover/SUV 3.3% $36,744
Subaru CrossTrek/XV Small Crossover/SUV 3.1% $31,290*
Hyundai Tucson Small Crossover/SUV 2.7% $36,449
Mazda CX-5 Small Crossover/SUV 2.7% $34,645
Hyundai Kona Small Crossover/SUV 2.5% $30,199
Volkswagen Tiguan Small Crossover/SUV 2.3% $36,595*
Kia Seltos Small Crossover/SUV 2.2% $29,545
Volkswagen Taos Small Crossover/SUV 2.2% $33,895
GMC Terrain Small Crossover/SUV 2.1% $36,945*
Kia Sportage Small Crossover/SUV 2.0% $34,345
Ford Bronco Sport Small Crossover/SUV 2.0% $40,690
Chevrolet Trax Small Crossover/SUV 1.9% $26,199
Nissan Kicks Small Crossover/SUV 1.8% $31,229
Chevrolet Equinox Small Crossover/SUV 1.8% $36,899
Toyota Corolla Cross Small Crossover/SUV 1.8% $30,980
Subaru Forester Small Crossover/SUV 1.7% $35,790
Honda HR-V Small Crossover/SUV 1.6% $33,810
Volkswagen Atlas Medium Crossover/SUV 1.6% $53,145
Jeep Wrangler Medium Crossover/SUV 1.5% $57,185
Jeep Grand Cherokee Medium Crossover/SUV 1.4% $60,465
Hyundai Santa Fe Medium Crossover/SUV 1.1% $49,999
Mazda CX-50 Medium Crossover/SUV 1.1% $42,045
Ford Explorer Medium Crossover/SUV 1.0% $52,730
Ford Bronco Medium Crossover/SUV 1.0% $52,410*
Toyota Highlander Medium Crossover/SUV 0.9% $51,580
Dodge Durango Medium Crossover/SUV 0.8% $62,190
Nissan Pathfinder Medium Crossover/SUV 0.8% $49,228
Ford F-Series Truck 13.7% $62,905
GMC Sierra Truck 6.5% $64,799
Ram P/U Truck 6.3% $66,140
Chevrolet Silverado Truck 5.7% $58,899
Toyota Tundra Truck 1.5% $58,255

* Note: The current study used 2024 model-year pricing for vehicles for which prices were not yet available for 2025 model-year. All prices are given before applicable taxes.

6.2 Other Operating Cost Adjustments for the Territories

The methodology to calculate fixed and variable expenses for the Territories remained the same as for the Provinces. However, by virtue of using different vehicle classes, total costs are higher than for the Provinces.

The Territories usually display more elevated costs for fuel due to the higher costs of transportation and servicing. At the same time, by adding Pick-up Trucks and eliminating the more fuel-efficient Compact Sedan and Electric Vehicle (Battery Electric/Plug-in Hybrid) classes, overall fuel consumption is also higher than for the ten Provinces.

In terms of vehicle maintenance, adjustments were also made to reflect the extra equipment necessary for safe driving in the North, as well as the use of special off-road or winter tires. The extra equipment that most acutely influences total maintenance costs for the Territories includes, but is not limited to, winter preparation packages, specialized tires, off-road survival kits and specialized signalling and communication devices. In addition, the use of special engine oils and other freeze-resistant liquids, as well as increased idling add to the operating expenses. For this reason, repair costs were increased by 25%, tire costs by 50% and fuel costs by 20% for the Territories.

7. Operating Cost Summary and Recommendations

We recommend continuing the practice of reimbursing government-authorized personal vehicle use on the basis of both fixed and variable expenses, referred to as the Travel Rate (also known as “Kilometric Rate” in the National Joint Council Travel Directive). At the same time, we recommend reimbursing employees for use of personal vehicles to commute to their designated remote worksites on the basis of variables expenses only, referred to as the Commuting Rate (also known as “Lower Kilometric Rate” in the National Joint Council Commuting Assistance Directive). This is consistent with current practice. All rates have been rounded up to the nearest 0.5 cents.

The following table provides calculated evaluations for both the Travel and Commuting Rates, as well as rates determined in the previous Annual Report (November 2023, for publication on January 1st, 2024) and the latest Fuel Update (August 2024, for publication on October 1st, 2024), for comparison.

Current Reimbursement Schedule (in dollars per kilometre)

  Travel Rate (Kilometric Rate) Commuting Rate (Lower Kilometric Rate)
Province/Territory Current Annual Report October 1st, 2024, Fuel Update January 1st, 2024, Annual Report Current Annual Report October 1st, 2024, Fuel Update January 1st, 2024, Annual Report
Alberta $0.575 $0.545 $0.535 $0.225 $0.230 $0.220
British Columbia $0.600 $0.575 $0.580 $0.260 $0.270 $0.275
Manitoba $0.560 $0.545 $0.560 $0.220 $0.230 $0.240
New Brunswick $0.605 $0.585 $0.590 $0.245 $0.255 $0.260
Newfoundland and Labrador $0.630 $0.605 $0.605 $0.250 $0.260 $0.265
Northwest Territories $0.720 $0.700 $0.705 $0.325 $0.325 $0.330
Nova Scotia $0.615 $0.595 $0.595 $0.245 $0.255 $0.255
Nunavut $0.725 $0.705 $0.680 $0.335 $0.335 $0.310
Ontario $0.630 $0.605 $0.605 $0.240 $0.245 $0.245
Prince Edward Island $0.600 $0.575 $0.575 $0.250 $0.255 $0.255
Quebec $0.605 $0.580 $0.580 $0.255 $0.265 $0.265
Saskatchewan $0.565 $0.550 $0.550 $0.235 $0.240 $0.240
Yukon $0.730 $0.715 $0.720 $0.350 $0.355 $0.355

Note: All figures were rounded up to the nearest half-cent.

The current Travel (Kilometric) Rates (for publication on January 1st, 2025) display moderate increases versus the Travel Rates from the previous Fuel Update (August 2024, for publication on October 1st, 2024), ranging from an increase of 1.5 cents in Manitoba, Saskatchewan and the Yukon to 3.0 cents in Alberta. At the same time, as compared to the rates published in the previous Fuel Update (August 2024, for publication on October 1st, 2024), Commuting (Lower Kilometric) Rates have either stayed constant or decreased by a maximum of 1.0 cent.

Year-over-year, as compared to the previous Annual Report (November 2023, for publication on January 1st, 2024), Travel Rates have varied between no change in Manitoba to a maximum increase of 4.5 cents in Nunavut, primarily due to Nunavut aligning their fuel prices with the rest of Canada. Correspondingly, the Commuting Rates varied between a decrease of 2.0 cents in Manitoba to an increase of 2.5 cents in Nunavut.

For illustrative purposes, the following chart provides a cost component comparison by Province and Territory for Travel Rates:

statistical chart Cost Component Comparison by Province

In conclusion, overall, both the Travel and Commuting Rates have exhibited moderate variations across Canada as compared to the previous Fuel Update (August 2024, for publication on October 1st, 2024). The main factors that led to the increase in vehicle-related costs for most Provinces and Territories were the higher cost of ownership, maintenance and insurance, primarily driven by inflation rates and a notable decrease in resale and residual values (which makes the cost of ownership of a vehicle more expensive). Fuel prices, on the other hand, decreased during the last three-month period, which had the opposite effect on both rates, tempering the increase in Travel Rates and lowering most Commuting Rates.

While most other cost components remain fairly constant over the course of a year, fuel prices fluctuate significantly on a daily basis. With the continued volatility of the energy markets, determined by global factors that are hard to forecast, it is difficult to make any predictions regarding future gasoline prices. Therefore, Fuel Updates will be carried out every three months. All future changes in fuel prices and sales taxes will be reflected in the subsequent Fuel Updates.