BC Ferries' and T.C. Ship Registry

[Ferryman]

I was having a look through the Transport Canada Ship registry website, and here are a few interesting things I noticed....

Like what Cascade said a while back, BC Ferries doesn't own the Queen of Oak Bay and Queen of Surrey. This website proves that they do, in fact not own one of these ships. BC Ferries does not own the Queen of Oak Bay, but they do own the Queen of Surrey. It alost seems ironic, seeming that's the only ferry in the fleet that's not owned by them, and that's the one that had an engine malfunction, and being beached in Horseshoe Bay.

Queen of Oak Bay:
www.tc.gc.ca/ShipRegistry/detail.asp?lang=e&ShipID=396065&category=all

Queen of Surrey:
www.tc.gc.ca/ShipRegistry/detail.asp?lang=e&ShipID=396048&category=all

Is there any answers as to why this is?

They also still list the Golden Queen, ex Saltspring Queen, ex Delta Princess, being owned by an investment group based out of Vancouver. I thought she was scrapped???

www.tc.gc.ca/ShipRegistry/detail.asp?lang=e&ShipID=190667&category=all

[Mike C]

Very interesting indeed.

I'm still stumped: Why would some stupid little company a way back in Ontario want to officially own a ferry??

[Neil]

It's not a stupid little company, it's a large multi-national financial firm, and they made money from leasing the ferries back to BC Ferries; there are also tax advantages to owning depreciating assets like ferries, among other things. It was just a big scam by the Bill Bennett government in the late '70s, selling the ferries for a quick cash infusion.

[Low Light Mike]

....in the accounting world, we refer to that kind of transaction as a "Sale Lease-Back". Allow me to share a bit of my world with you......

from the Canadian Institute of Chartered Accountants:

Leased Tangible Capital Asset

In keeping with the principle of accounting for the economic substance, the Guideline views a sale-leaseback transaction
resulting in a leased tangible capital asset (LTCA) as a financing deal. The property has been used as collateral for a loan to the
government. For the government, nothing has changed in relation to that portion of the property leased back as it retains control over the benefits and is responsible for the risks associated with that portion of the property. Given that nothing has changed apart from receiving a loan, the Guideline recognizes TCAs on the statement of financial position at the same value at which therespective property was pre-sale-leaseback (ie: the carrying amount).

Also, when the fair value of the property exceeds its carrying amount, (referred to as a ‘holding gain’), those gains shall not be
recognized in the financial statements. However, should the government negotiate a deal which is either economically
advantageous (for example, they receive proceeds for the property at an amount greater than its fair value), or disadvantageous, then those ‘economic gains’ or ‘economic
losses’ are immediately recognized in the statement of operations.
=================

Sorry, I just couldn't resist being a nerd.....now do you understand why I'm so nit-picky by nature ?

[Neil]

Oh, come on, Nanaimo.... you think we didn't know all that stuff already? Sheesh. Let's see now... where was that old post where you were giving Cascade the gears about his interest in finance and accounting practises....
I fully own to being accounting challenged. So, the ferries were actually collateral for a 'loan'?
Were they not sold, in the commonly understood sense? And what is meant in the second paragraph about the government negotiating advantageous deals?

[Low Light Mike]

I was just being silly with the accounting stuff.....I don't know what the exact scenario of the Oak-Bay & Surrey leasebacks were.

[Neil]

Could have fooled me. Did, actually. Maybe you should be a political speech writer.