Effective Date: April 1, 2016

Applicable FAM Policies: 705- Procurement

Applicability: GNWT Departments and Public Agencies

Aircraft charters may be the most efficient and effective means to deliver critical programs and services across the NWT due to limited availability or impracticality of alternate means of transportation to most locations.

The chartering of aircraft services is permissible only if more economical travel is either unavailable, impractical or there is an emergency.

INTERPRETATION

The GNWT Procurement Guidelines provides guidance on chartering airplanes. The Department of Infrastructure additionally provides a notice board that Departments and certain Public Agencies can reference and use for available Government Air Charters.

The form "Contract for Aircraft Charter Under $10,000" can be accessed through the System for Accountability and Management (SAM) website must be used to meet insurance requirements whenever requesting chartered aircraft services with the exception of organizations (e.g., the Forest Management Division, Department of Environment and Natural Resources) that have a legally pre-approved form for Aircraft Chartering.

Government employees not on duty travel are subject to the provisions of the following and in respect of taxable implications for non-government employees (Appendix A):

• The Regional Superintendent or Director Finance and Administration (or equivalent) shall designate an Air Charter Liaison Officer to:
  • record the purpose, flight details and cost of all air charters in his or her regional office for audit purposes;
  • provide information on alternative economical transportation; and, assist with coordinating and sharing air charters.
• Before chartering an aircraft, the responsible expenditure officer shall:
  • communicate air charter requirements to the Air Charter Liaison Officer for their region;
  • review other air charter plans for opportunities to share charters economically; and,
  • procure the most economical and practical transportation available.
  • report all air charters to the applicable Air Charter Liaison Officer.
• Government employees may charter (lease) and pilot an aircraft only in accordance with FAM IB 760.01 Employee Duty Travel. Employees authorized to pilot an aircraft for duty travel shall only be permitted to pilot an aircraft if any passengers are voluntary and any cargo is required for business travel.

Sharing air charters

Where arrangements are made in advance, nongovernment passengers and/or goods may join in a Government air charter provided that:

• no threat to the public interest could arise as a result;
• the air charter supplier agrees;
• all expenditure officers, duty travellers, and Government goods shippers agree;
• the non-government party has agreed in writing to pay the carrier for the costs, or portion thereof, associated with their use of the aircraft when their reason for travel is not for government business purposes or in the public interest;
• where the non-government party does not pay the carrier or pays less than their share of the costs and the trip is not in the public interest or for government business purposes then a taxable benefit is deemed to accrue to either the non-government party or the Government member who authorized the travel. The Government authority must be issued a T4A and a taxable benefit recorded in the Government payroll system only if the Government member stands to personally benefit by authorizing the travel (e.g., the passenger is a friend or relative of the Government member); otherwise, the T4A must be issued to the non-government traveler (In either case, GST would have to be paid on the assessed value of the trip); (see Appendix A)
• any payment from the non-government party is to be made to the carrier and not to the GNWT; and,
• where the travel of the non-government party is for government business purposes or in the public interest no costs are payable by the nongovernment party to the carrier nor will there be a taxable benefit deemed to be created for the Government member authorizing the travel. However, a Grant-in-kind and GST implications (in accordance with FAM 810 and IB 810.02) must be considered and the Government must pay the GST on the value of the Grant-in-kind. (see Appendix A)

Where arrangements have not been made in advance (i.e.; the non-government passenger is at the airport and requests the use of an empty seat and/or cargo space on the charter without prior arrangements being made), a non-government party and/or goods may join in a Government air charter provided that all of the above and the following are met:

• the travel is authorized by a Government employee or Minister;
• where the costs are attributable to the nongovernment passenger and/or cargo cannot be calculated at the time of the flight the nongovernment passenger must agree to pay these costs directly to the carrier and the carrier must agree to remit an equivalent amount to the GNWT once the payment is received if the GNWT has already paid for the charter, or reduce the invoice to the GNWT if the flight is not yet paid for.

For the purposes of calculating a taxable benefit, the amount (less any payments made) is calculated as the equivalent regular commercial economy airfare for a regularly scheduled flight to the same destination. However, where regularly scheduled flights do not exist and a charter must be used then the average cost per seat of the charter to the government shall be used to calculate the benefit.

Where travel is deemed to be for government business purposes or in the public interest the Regional Superintendent or Director of Finance and Administration (or equivalent) will ensure that:

• a signed justification is obtained from the person authorizing the travel that it is/was for government business purposes or in the public interest;
• he/she co-signs the justification certifying agreement; and,
• the justification is filed with the other charter documents.

Appendix A - IB 705.14 Air Chartering