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INCOME TAXES | 12 Months Ended
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Dec. 31, 2020
INCOME TAXES |
INCOME TAXES | 10. Income Taxes Income Tax (Recovery) Expense
($ millions) |  | 2020 |  | 2019 |  |
Current: |  |  |  |  |  |
| Current year |  | (650 | ) | 1 524 |  |
| Adjustments to current income tax of prior years |  | (9 | ) | 28 |  |
Deferred: |  |  |  |  |  |
| Origination and reversal of temporary differences |  | (973 | ) | (819 | ) |
| Adjustments in respect of deferred income tax of prior years |  | (52 | ) | 83 |  |
| Changes in tax rates and legislation |  | (106 | ) | (1 124 | ) |
| Movement in unrecognized deferred income tax assets |  | 12 |  | (58 | ) |
Total income tax recovery |  | (1 778 | ) | (366 | ) |
Reconciliation of Effective Tax Rate The provision for income taxes reflects an effective tax rate that differs from the statutory tax rate. A reconciliation of the difference is as follows:
($ millions) |  | 2020 |  | 2019 |
(Loss) earnings before income tax |  | (6 097 | ) | 2 533 |
Canadian statutory tax rate |  | 24.96% |  | 26.74% |
Statutory tax |  | (1 522 | ) | 677 |
Add (deduct) the tax effect of: |  |  |  |  |
| Non-taxable component of capital gains |  | (45 | ) | (146) |
| Share-based compensation and other permanent items |  | 7 |  | 25 |
| Assessments and adjustments |  | (58 | ) | 112 |
| Impact of income tax rates and legislative changes(1) |  | (173 | ) | (1 067) |
| Foreign tax rate differential |  | 3 |  | 83 |
| Movement in unrecognized deferred income tax assets |  | 12 |  | (58) |
| Other |  | (2 | ) | 8 |
Total income tax recovery |  | (1 778 | ) | (366) |
Effective tax rate |  | 29.2% |  | (14.4)% |
(1) | In the second quarter of 2019, the company recognized a deferred income tax recovery of $1.116 billion associated with the Government of Alberta's substantive enactment of legislation for the staged reduction of the corporate income tax rate from 12% to 8%. The deferred income tax recovery of $1.116 billion was comprised of $910 million recovery in the Oil Sands segment, $88 million recovery in the Refining and Marketing segment, $70 million recovery in the Exploration and Production segment, and $48 million recovery in the Corporate and Eliminations segment.
Deferred Income Tax Balances The significant components of the company's deferred income tax (assets) liabilities and deferred income tax expense (recovery) are comprised of the following:
|  | Deferred Income Tax (Recovery) Expense |  | Deferred Income Tax Liability (Asset) |  |
($ millions) |  | 2020 |  | 2019 |  | December 31 2020 |  | December 31 2019 |  |
Property, plant and equipment |  | (1 084 | ) | (2 348 | ) | 11 963 |  | 12 814 |  |
Decommissioning and restoration provision |  | 21 |  | 259 |  | (2 304 | ) | (2 092 | ) |
Employee retirement benefit plans |  | 34 |  | 32 |  | (605 | ) | (576 | ) |
Tax loss carry-forwards |  | (20 | ) | 16 |  | (176 | ) | (156 | ) |
Other |  | (70 | ) | 123 |  | (120 | ) | (23 | ) |
Net deferred income tax recovery and liability |  | (1 119 | ) | (1 918 | ) | 8 758 |  | 9 967 |  |
Change in Deferred Income Tax Balances
($ millions) |  | 2020 |  | 2019 |  |
Net deferred income tax liability, beginning of year |  | 9 967 |  | 11 917 |  |
Recognized in deferred income tax recovery |  | (1 119 | ) | (1 918 | ) |
Recognized in other comprehensive income |  | (62 | ) | (23 | ) |
Foreign exchange, acquisition and other |  | (28 | ) | (9 | ) |
Net deferred income tax liability, end of year |  | 8 758 |  | 9 967 |  |
Deferred Tax in Shareholders' Equity
($ millions) |  | 2020 |  | 2019 |  |
Deferred Tax in Other Comprehensive Income |  |  |  |  |  |
| Actuarial loss on employment retirement benefit plans |  | (62 | ) | (23 | ) |
Total income tax recovery reported in equity |  | (62 | ) | (23 | ) |
Deferred income tax assets are recognized for tax loss carry-forwards to the extent that the realization of the related tax benefit is probable based on estimated future earnings. Suncor has not recognized a $78 million (2019 – $87 million) deferred income tax asset on $640 million (2019 – $715 million) of capital losses related to unrealized foreign exchange on U.S. dollar denominated debt, which can only be utilized against future capital gains. No deferred tax liability has been recognized at December 31, 2020, on unremitted net earnings of foreign subsidiaries, as the company is able to control the timing and amount of distributions and is not expected to incur any taxes associated with future distributions.

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