Canadian Coast Guard Cutter sold: $90,111.11

[Kreskin]

Campbell River's former Coast Guard Cutter Point Race and her sister ship the Point Henry have been sold at rock bottom prices, even though they were fully-functioning vessels worth far more.
That's the word this week from boat builder Steve Daigle, of Daigle Welding & Marine. "I was a little shocked to see that our government just let them go like that," Daigle told the Courier-Islander Wednesday. "It just doesn't make sense. They went for scrap value. They're fully functional, serviceable boats that went for scrap value."

Daigle said both cutters were worth far more. "I get a lot of emails from different countries like India and Viet Nam, people looking for patrol boats, new or used, and they need something right now," he said. "If you waited it out long enough, you probably could have gotten $500,000 or $600,000 each.
"The Point Henry, just before it was taken out of service, they spent $140,000 on the machinery. Then you sell it for $90,000."

More about the giveaway here

Holy crow, what was this all about? It was like a secret sale on the internet. Starting bids at 90k and sold for $90,111? Maybe one bid? Refit for 140K just before taking out of service? Insane.

 

[B00Mer]

nice little boat...

Pacific Region - Shorelines Newsletter Fall 2011 - Changes to the Fleet - Canadian Coast Guard

 

[SLM]

Campbell River's former Coast Guard Cutter Point Race and her sister ship the Point Henry have been sold at rock bottom prices, even though they were fully-functioning vessels worth far more.
That's the word this week from boat builder Steve Daigle, of Daigle Welding & Marine. "I was a little shocked to see that our government just let them go like that," Daigle told the Courier-Islander Wednesday. "It just doesn't make sense. They went for scrap value. They're fully functional, serviceable boats that went for scrap value."

Daigle said both cutters were worth far more. "I get a lot of emails from different countries like India and Viet Nam, people looking for patrol boats, new or used, and they need something right now," he said. "If you waited it out long enough, you probably could have gotten $500,000 or $600,000 each.
"The Point Henry, just before it was taken out of service, they spent $140,000 on the machinery. Then you sell it for $90,000."

More about the giveaway here

Holy crow, what was this all about? It was like a secret sale on the internet. Starting bids at 90k and sold for $90,111? Maybe one bid? Refit for 140K just before taking out of service? Insane.

Is there something about the government not making sound financial decisions that's surprising to you? Lol. Sad but true fact of bureaucraptic life I'm afraid.

 

[gerryh]

not sure if this apply's in this circumstance, but, when a corporation has made capital purchases (like these cutters) and have depreciated the value of that purchase every year. If they decide to sell that equipment and it is down to $500 declared value on their books and they sell it at...lets say $2500..... then the corporation must declare the $2000 as a capital gain and pay taxes on it. Could this be part of the reason for the "fire sale" pricing of these vessels.

 

[SLM]

not sure if this apply's in this circumstance, but, when a corporation has made capital purchases (like these cutters) and have depreciated the value of that purchase every year. If they decide to sell that equipment and it is down to $500 declared value on their books and they sell it at...lets say $2500..... then the corporation must declare the $2000 as a capital gain and pay taxes on it. Could this be part of the reason for the "fire sale" pricing of these vessels.

This is the Coast Guard isn't it? It would not be a for-profit organization, therefore wouldn't pay taxes in the first place.

But ordinarily yes it would result in a capital gain or possibly a recapture of Capital Cost Allowance depending if the proceeds of disposition left the undepreciated capital cost in a negative balance.(Depends if there are any additional assets in the class)

However, really specialized equipment or items that retain their value over time are not usually allowed to be depreciated, for tax purposes, at a high annual rate. Buildings, for example, only depreciate at 4% per year.

 

[Kreskin]

not sure if this apply's in this circumstance, but, when a corporation has made capital purchases (like these cutters) and have depreciated the value of that purchase every year. If they decide to sell that equipment and it is down to $500 declared value on their books and they sell it at...lets say $2500..... then the corporation must declare the $2000 as a capital gain and pay taxes on it. Could this be part of the reason for the "fire sale" pricing of these vessels.

Maybe, except you still make money when you sell anything that has caiptal gains. I think it might be more about meeting expense budgets and deficit targets. The asset doesn't make money, it costs money. In politics it's all about how much the government spends, not how much value it holds.

 

[bill barilko]

nice little boat...

Hardly-it was a beat up old tub-BC coastal conditions being what they are swanning around in a boat like that is none too smart.

 

[damngrumpy]

Its always the same Canadians buy high and sell low. This is a pattern though,
the fast ferries were sold for little or nothing and a private American firm used
them in the same waters for a while then sold them for a profit to the Middle East.
We are also good at buying junk, remember the British Subs that don't work and
are not sea worthy. The only useful Sub we have in in the West Edmonton Mall.
I think someone should write a book about our screw ups. The Italian army trucks
that wouldn't even plow snow off a runway. There is likely more.

 

[gerryh]

Its always the same Canadians buy high and sell low. This is a pattern though,
the fast ferries were sold for little or nothing and a private American firm used
them in the same waters for a while then sold them for a profit to the Middle East.
We are also good at buying junk, remember the British Subs that don't work and
are not sea worthy. The only useful Sub we have in in the West Edmonton Mall.
I think someone should write a book about our screw ups. The Italian army trucks
that wouldn't even plow snow off a runway. There is likely more.

There aren't any subs at west edmonton mall anymore.

 

[JLM]

Its always the same Canadians buy high and sell low. This is a pattern though,
the fast ferries were sold for little or nothing and a private American firm used
them in the same waters for a while then sold them for a profit to the Middle East.
We are also good at buying junk, remember the British Subs that don't work and
are not sea worthy. The only useful Sub we have in in the West Edmonton Mall.
I think someone should write a book about our screw ups. The Italian army trucks
that wouldn't even plow snow off a runway. There is likely more.

What's good for the goose is good for the gander! Selling junk at an inflated value would be a little unethical don't you think?

 

[taxslave]

Been a while since I've seen either one of them but both are getting long in the tooth. Auctions are usually a fair indicator of value. My question is if Steve thinks they are worth so much why didn't he put a $250000 bid in one one of them? One would have to look at their last inspection to see if they might be worth more than scrap. A boat that size would require at least $50000/yr in maintenance just to keep it afloat.

 

[Kreskin]

Been a while since I've seen either one of them but both are getting long in the tooth. Auctions are usually a fair indicator of value. My question is if Steve thinks they are worth so much why didn't he put a $250000 bid in one one of them? One would have to look at their last inspection to see if they might be worth more than scrap. A boat that size would require at least $50000/yr in maintenance just to keep it afloat.

I don't think anyone knew they were on auction. Daigle is a big boat builder on the west coast. I'm sure he could've double or tripled the sale acting as a broker. He gets orders from everywhere.

 

[taxslave]

I don't think anyone knew they were on auction. Daigle is a big boat builder on the west coast. I'm sure he could've double or tripled the sale acting as a broker. He gets orders from everywhere.

Builder of little boats.
I would have expected these boats to be on the government auction site, but I never looked at the federal site in months.
Due to the age of these boats it is possible that there is asbestos in them which would make cleaning for export very expensive.

 

[L Gilbert]

Holy crow, what was this all about? It was like a secret sale on the internet. Starting bids at 90k and sold for $90,111? Maybe one bid? Refit for 140K just before taking out of service? Insane.

That's SOP for gov'ts. Like Jean ChRETIeN once said, "Dat's wut we doo".

 

[SLM]

That's SOP for gov'ts. Like Jean ChRETIeN once said, "Dat's wut we doo".

Nice Chretien impression. You've really captured him.Lol.

 

[L Gilbert]

Nice Chretien impression. You've really captured him.Lol.

I'd go on stage but I can't look nearly that ugly. lol