Regulation - LGIC

Allowing for early release of rental vehicles impounded for seven days

Regulation Number(s):
Instrument Type:
Regulation - LGIC
Bill or Act:
Highway Traffic Act
Summary of Proposal:
The Ministry of Transportation (MTO) is considering regulatory amendments to grant police the discretion to release rental vehicles impounded for seven days before the impound period has expired, under certain circumstances.

Ontario currently applies two different forms of vehicle impoundments as sanctions for some on-road behaviours or offences:

1. Short-term vehicle impoundments (seven-day) and;
2. Long-term impoundments (45, 90 and 180 days)

Short-term vehicle impoundments are applied for various offences under the Highway Traffic Act including impaired driving offences, stunt driving offences, and for driving while suspended. Long-term vehicle impoundments are for drivers who drive while under a Criminal Code of Canada suspension. The police carry out the administration of short-term vehicle impoundments while MTO administers long-term impoundments.

MTO has established existing mechanisms for rental car companies to negotiate early release for long-term vehicle impoundments, however, such a process does not currently extend to short-term impoundments.

Vehicle impoundments serve to sanction unsafe driving behaviour and to prevent drivers from repeating this behaviour. In the case of rental vehicle impoundments, the driver is not sanctioned once the rental term concludes, but rather the rental company receives an impoundment and associated costs. While some of these costs can be collected from renters, there are high rates of non-payment.

Short-term vehicle impoundments affecting rental vehicles impose financial burden on the rental car industry. After accounting for funds that can be collected from renters, car rental companies report annual out-of-pocket costs for seven-day impoundments of between $0.25M and $1.17M.

To reduce this burden, the Ministry is considering regulatory amendments to grant police discretion to release rental vehicles to rental companies prior to the end of short-term impoundments under certain circumstances. To qualify for early release, police would need to be satisfied that the vehicle was under a rental agreement of 30 days or less and the impoundment was related to one of three circumstances:

- Impoundment was the result of stunt driving under Highway Traffic Act section 172;

- Impoundment was related to impaired driving (by drug, drug and alcohol, alcohol, or refusal of testing) under Highway Traffic Act section 48.4; or

- The driver was not an authorized driver of the rental vehicle, and the vehicle was impounded due to driving while suspended under Highway Traffic Act section 55.2.

The objective of this proposed early release policy is to reduce the financial burden of unrecoverable costs for the rental car industry, while creating minimal operational burden on enforcement. Local police services would have discretion as to whether to allow for an early release program for short-term impoundments related to rental vehicles.

MTO is soliciting public comment on these proposed regulatory amendments.
Analysis of Regulatory Impact:
A regulatory impact analysis of the potential economic effects of amendments under consideration finds that across the rental vehicle and towing/impound industries, the policy would result in between a net loss of $(-181.88) and net savings of $12,981.26 annually. Over the next ten years this is worth between $(-1,631.58) - $116,453.16 to the rental car industry.
Further Information:
Proposal Number:
Posting Date:
October 8, 2020
Comments Due Date:
November 1, 2020
Contact Address:
Ministry of Transportation
Road Safety Program Development Office
Safety Program Development Branch
87 Sir William Hearst Avenue
Building "A", Room 212
Toronto, Ontario
M3M 0B4