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Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2023
Income Taxes |
Income Taxes | 10. Income Taxes Income Tax Expense (Recovery) ​
​ | ​ | ​ | ​ | ​ | ​
($ millions) |  | 2023 |  | 2022 |
Current: | ​ | ​ | ​ | ​ | ​
Current year |  | 1 782 |  | 4 333 | ​
Adjustments in respect of current income tax of prior years |  | (48) |  | (104) | ​
Deferred: | ​ | ​ | ​ | ​ | ​
Origination and reversal of temporary differences |  | 542 |  | (1 063) | ​
Adjustments in respect of deferred income tax of prior years |  | 96 |  | 54 | ​
Changes in tax rates and legislation |  | (60) |  | (27) | ​
Movement in unrecognized deferred income tax assets |  | (18) |  | 46 | ​
Total income tax expense |  | 2 294 |  | 3 239 | ​
​ 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) |  | 2023 |  | 2022 |
Earnings before income tax |  | 10 589 |  | 12 316 | ​
Canadian statutory tax rate |  | 23.99% | ​ | 24.16% | ​
Statutory tax |  | 2 540 |  | 2 976 | ​
Add (deduct) the tax effect of: | ​ | ​ | ​ | ​ | ​
Non-taxable component of capital (gains) losses |  | (10) |  | 67 | ​
Share-based compensation and other permanent items |  | 14 |  | - | ​
Assessments and adjustments |  | 63 |  | (49) | ​
Impact of income tax rates and legislative changes(1) |  | (74) |  | (84) | ​
Non-taxable component of acquisitions and dispositions(2) | ​ | (461) | ​ | (25) | ​
Foreign tax rate differential(3) |  | 234 |  | 290 | ​
Movement in unrecognized deferred income tax assets |  | (18) |  | 46 | ​
Other |  | 6 |  | 18 | ​
Total income tax expense |  | 2 294 |  | 3 239 | ​
Effective tax rate |  | 21.7% |  | 26.3% | ​
(1) | The year ended December 31, 2022 includes a current income tax recovery of $39 million related to the sale of the company’s wind and solar assets (note 16).
(2) | The year ended December 31, 2023 includes a non-taxable gain on the U.K. disposition and a bargain purchase gain on the TotalEnergies Canada acquisition (note 16).
(3) | The year ended December 31, 2022 includes a deferred income tax recovery of $171 million related to the sale of the company’s UK assets (note 16)
​ Deferred Income Tax Balances The significant components of the company’s deferred income tax (assets) liabilities and deferred income tax expense (recovery) are comprised of the following:
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Deferred Income Tax Expense (Recovery) | ​ | Deferred Income Tax Liability (Asset) |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | December 31 | ​ | December 31 |
($ millions) |  | 2023 |  | 2022 |  | 2023 |  | 2022 |
Property, plant and equipment |  | (423) |  | (729) |  | 10 996 |  | 11 093 | ​
Decommissioning and restoration provision |  | (25) |  | (10) |  | (2 644) |  | (2 292) | ​
Employee retirement benefit plans |  | (23) |  | (92) |  | (278) |  | (297) | ​
Tax loss carry-forwards(1) |  | 867 |  | (14) |  | (11) |  | (29) | ​
Other |  | 164 |  | (145) |  | (147) |  | (111) | ​
Net deferred income tax (recovery) / expense and liability |  | 560 |  | (990) |  | 7 916 |  | 8 364 | ​
(1) | The year ended December 31, 2023, the company used tax losses arising from the acquisition of TotalEnergies Canada (note 16).
​ ​ Change in Deferred Income Tax Balances ​
​ | ​ | ​ | ​ | ​ | ​
($ millions) |  | 2023 |  | 2022 |
Net deferred income tax liability, beginning of year |  | 8 364 |  | 9 081 | ​
Recognized in deferred income tax (recovery) / expense |  | 560 |  | (990) | ​
Recognized in other comprehensive income |  | 42 |  | 264 | ​
Foreign exchange, acquisition, disposition and other |  | (1 050) |  | 9 | ​
Net deferred income tax liability, end of year |  | 7 916 |  | 8 364 | ​
​ Deferred Tax in Shareholders’ Equity ​
​ | ​ | ​ | ​ | ​ | ​
($ millions) |  | 2023 |  | 2022 |
Deferred Tax in Other Comprehensive Income | ​ | ​ | ​ | ​ | ​
Actuarial gain on employment retirement benefit plans |  | 42 |  | 264 | ​
Total income tax expense reported in equity |  | 42 |  | 264 | ​
​ 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 $101 million (2022 – $120 million) deferred income tax asset on $845 million (2022 – $986 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, 2023, 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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