10. Income taxes


	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Current income tax expense (benefit)	$	0.8	$	(1.6)	$	2.6	$	5.7
Deferred tax expense (benefit)		1.8		3.0		(16.8)		(6.0)
Total income tax expense (benefit), net	$	2.6	$	1.4	$	(14.2)	$	(0.3)

For the three and nine months ended September 30, 2016 and 2015

Income tax expense for the three months ended September 30, 2016 was $2.6 million. Expected income tax benefit for the same period, based on the Canadian enacted statutory rate of 26%, was $20.2 million. The primary item increasing the tax rate for the three months ended September 30, 2016 was $22.5 million related to goodwill impairment. In addition, the rate was further impacted by a net increase to our valuation allowances of $8.6 million, consisting primarily of increases of $9.3 million in Canada related to losses and a decrease of $0.7 million in the United States due to additional earnings. These items were offset by $7.2 million related to capital loss on intercompany notes, $1.9 million relating to operating in higher tax rate jurisdictions and $0.8 million of other permanent differences.

Income tax expense for the three months ended September 30, 2015 was $1.4 million. Expected income tax benefit for the same period, based on the Canadian enacted statutory rate of 26%, was $0.5 million. The primary items impacting the tax rate for the three months ended September 30, 2015 were $4.0 million relating to a change in valuation allowance and $2.8 million related to capital gain on repatriation of wind sale proceeds. These items were partially offset by $2.6 million of dividend withholding and other taxes, $2.2 million related to foreign exchange and $0.1 million of other permanent differences.

Income tax benefit for the nine months ended September 30, 2016 was $14.2 million. Expected income tax benefit for the same period, based on the Canadian enacted statutory rate of 26%, was $32.2 million. The primary items increasing the tax rate for the nine months ended September 30, 2016 were $22.5 million relating to goodwill impairment, $5.5 million relating to foreign exchange and $1.1 million of other permanent differences. In addition, the rate was further impacted by a net increase to the Company’s valuation allowances of $13.2 million, consisting primarily of increases of $31.6 million in Canada related to losses and a decrease of $18.4 million in the United States due to tax restructurings and additional earnings. These items were offset by $18.5 million Canadian capital losses recognized on tax restructurings, $3.0 million related to capital loss on intercompany notes and $2.8 million relating to operating in higher tax rate jurisdictions.

Income tax benefit for the nine months ended September 30, 2015 was $0.3 million. Expected income tax expense for the same period, based on the Canadian enacted statutory rate of 26%, was $0.3 million. The primary items impacting the tax rate for the nine months ended September 30, 2015 were $6.3 million relating to foreign exchange, $4.0 million relating to operating in higher tax rate jurisdictions, $3.6 million related to tax credits and $0.6 million of other permanent differences. These items were partially offset by $10.1 million relating to a change in the valuation allowance, $2.8 million related to a capital gain on repatriation of wind sale proceeds and $1.0 million relating to dividend withholding and other taxes.

As of September 30, 2016, we have recorded a valuation allowance of $188.5 million. The amount is comprised primarily of provisions against Canadian and U.S. net operating loss carryforwards. In assessing the recoverability of our deferred tax assets, we consider whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon projected future taxable income in the United States and in Canada and available tax planning strategies.