Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

The provision for income tax was as follows:



Expense (recovery)	2019			2018			2017
Current corporate income tax – North America	$	354		$	312		$	(145	)
Current corporate income tax – North Sea	112			28			57
Current corporate income tax – Offshore Africa	44			54			45
Current PRT ⁽¹⁾ – North Sea	(89		)	(29		)	(132		)
Other taxes	13			9			11
Current income tax	434			374			(164		)
Deferred corporate income tax	(895		)	540			586
Deferred PRT⁽¹⁾– North Sea	1			17			54
Deferred income tax	(894		)	557			640
Income tax	$	(460	)	$	931		$	476


(1)	Petroleum Revenue Tax.

Schedule of provision for income tax reconciliation

The provision for income tax is different from the amount computed by applying the combined statutory Canadian federal and provincial income tax rates to earnings before taxes. The reasons for the difference are as follows:



	2019			2018			2017
Canadian statutory income tax rate	26.5%			27.0%			27.0%
Income tax provision at statutory rate	$	1,313		$	951		$	776
Effect on income taxes of:
UK PRT and other taxes	(76		)	(3		)	(67		)
Impact of deductible UK PRT and other taxes on corporate income tax	32			3			28
Foreign and domestic tax rate differentials	(48		)	6			(43		)
Non-taxable portion of capital (gains) losses	(65		)	142			(86		)
Stock options exercised for common shares	47			(41		)	33
Income tax rate and other legislative changes	(1,618		)	—			10
Non-taxable gain on corporate acquisitions	—			(119		)	(63		)
Revisions arising from prior year tax filings	(41		)	(136		)	(3		)
Change in unrecognized capital loss carryforward asset	(65		)	142			(86		)
Other	61			(14		)	(23		)
Income tax (recovery) expense	$	(460	)	$	931		$	476

Summary of major temporary differences, movements in deferred tax assets and liabilities, and net deferred income tax liability

Movements in deferred tax assets and liabilities recognized in net earnings during the year were as follows:



	2019			2018			2017
Property, plant and equipment and exploration and evaluation assets	$	(775	)	$	281		$	541
Lease assets	414			—			—
Unrealized foreign exchange loss (gain) on long-term debt	55			(75		)	120
Unrealized risk management activities	(14		)	18			(46		)
Asset retirement obligations	(317		)	175			(88		)
Lease liabilities	(418		)	—			—
Share-based compensation	(11		)	(5		)	—
Loss carryforwards	170			(61		)	48
Investments	(10		)	(50		)	(2		)
Investment in North West Redwater Partnership	179			162			30
Deferred PRT	1			17			54
PRT deduction for corporate income tax	—			(7		)	(21		)
Other	(168		)	102			4
	$	(894	)	$	557		$	640

The following table summarizes the temporary differences that give rise to the net deferred income tax liability:



	2019			2018
Deferred income tax liabilities
Property, plant and equipment and exploration and evaluation assets	$	12,074		$	12,885
Lease assets	412			—
Unrealized risk management activities	27			33
PRT deduction for corporate income tax	—			1
Investments	36			46
Investment in North West Redwater Partnership	593			414
Other	52			179
	13,194			13,558
Deferred income tax assets
Asset retirement obligations	(1,488		)	(1,142		)
Lease liabilities	(416		)	—
Share-based compensation	(16		)	(5		)
Loss carryforwards	(685		)	(855		)
Unrealized foreign exchange loss on long-term debt	(49		)	(104		)
Deferred PRT	(1		)	(1		)
	(2,655		)	(2,107		)
Net deferred income tax liability	$	10,539		$	11,451

The following table summarizes the movements of the net deferred income tax liability during the year:



	2019			2018			2017
Balance – beginning of year	$	11,451		$	10,975		$	9,073
Deferred income tax (recovery) expense	(894		)	557			640
Deferred income tax expense (recovery) included in other comprehensive income	8			(6		)	4
Foreign exchange adjustments	(26		)	41			(29		)
Business combinations (note 6,7)	—			(116		)	1,287
Balance – end of year	$	10,539		$	11,451		$	10,975