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INCOME TAXES | 12 Months Ended
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Dec. 31, 2024
Income Taxes [Abstract] |
INCOME TAXES | INCOME TAXES ACCOUNTING POLICY Income tax expense includes both current and deferred taxes. We recognize income tax expense in net income unless it relates to an item recognized directly in equity or other comprehensive income. We provide for income taxes based on all of the information that is currently available. Current tax expense is tax we expect to pay or receive based on our taxable income or loss during the year. We calculate the current tax expense using tax rates enacted or substantively enacted as at the reporting date, including any adjustment to taxes payable or receivable related to previous years. Deferred tax assets and liabilities arise from temporary differences between the carrying amounts of the assets and liabilities we recognize on our Consolidated Statements of Financial Position and their respective tax bases. We calculate deferred tax assets and liabilities using enacted or substantively enacted tax rates that will apply in the years in which the temporary differences are expected to reverse. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax assets and liabilities and they relate to income taxes levied by the same authority on: •the same taxable entity; or •different taxable entities where these entities intend to settle current tax assets and liabilities on a net basis or the tax assets and liabilities will be realized and settled simultaneously. We recognize a deferred tax asset for unused losses, tax credits, and deductible temporary differences to the extent it is probable that future taxable income will be available to use the asset. JUDGMENTS We make significant judgments in interpreting tax rules and regulations when we calculate income tax expense. We make judgments to evaluate whether we can recover a deferred tax asset based on our assessment of existing tax laws, estimates of future profitability, and tax planning strategies. INCOME TAX EXPENSE
|  | Years ended December 31
(In millions of dollars) |  | 2024 | 2023
Current tax expense: |  |  |
For the current period |  | 884 |  | 370 |
Change in estimate relating to prior periods |  | (20) |  | (43) |
Total current tax expense |  | 864 |  | 327 |
Deferred tax (recovery) expense: |  |  |
(Reversal) origination of temporary differences |  | (291) |  | 91 |
Change in tax rate |  | — |  | 52 |
Change in estimate relating to prior periods |  | (1) |  | 47 |
Total deferred tax (recovery) expense |  | (292) |  | 190 |
Total income tax expense |  | 572 |  | 517 |
Below is a summary of the difference between income tax expense computed by applying the statutory income tax rate to income before income tax expense and the actual income tax expense for the year.
|  | Years ended December 31
(In millions of dollars, except tax rates) |  | 2024 | 2023
Statutory income tax rate |  | 26.2 | % | 26.2 | %
Income before income tax expense |  | 2,306 |  | 1,366 |
Computed income tax expense |  | 604 |  | 358 |
Increase (decrease) in income tax expense resulting from: |  |  |
Non-deductible stock-based compensation |  | (13) |  | 9 |
Revaluation of deferred tax balances due to corporate reorganization-driven change in income tax rate |  | — |  | 52 |
Non-taxable income from security investments |  | — |  | (16) |
Non-deductible loss on joint venture's non-controlling interest purchase obligation |  | — |  | 111 |
Other |  | (19) |  | 3 |
Total income tax expense |  | 572 |  | 517 |
Effective income tax rate |  | 24.8 | % | 37.8 | %
DEFERRED TAX ASSETS AND LIABILITIES Below is a summary of the movement of net deferred tax assets and liabilities during 2024 and 2023.
Deferred tax assets (liabilities) (In millions of dollars) | Property, plant and equipment and inventory | Goodwill and other intangibles |  | Investments | Lease liabilities | Contract and deferred commission cost assets | Other | Total
December 31, 2023 | (3,509) |  | (3,316) |  |  | (2) |  | 554 |  | (123) |  | 17 |  | (6,379) |
Recovery (expense) in net income | 284 |  | (29) |  |  | 1 |  | 17 |  | (56) |  | 75 |  | 292 |
Expense in other comprehensive income | — |  | — |  |  | (1) |  | — |  | — |  | (193) |  | (194) |
December 31, 2024 | (3,225) |  | (3,345) |  |  | (2) |  | 571 |  | (179) |  | (101) |  | (6,281) |
Deferred tax assets (liabilities) (In millions of dollars) | Property, plant and equipment and inventory | Goodwill and other intangibles |  | Investments | Lease liabilities | Contract and deferred commission cost assets | Other | Total
December 31, 2022 | (2,149) |  | (1,754) |  |  | (89) |  | 458 |  | (87) |  | (31) |  | (3,652) |
(Expense) recovery in net income | (95) |  | (89) |  |  | 35 |  | 14 |  | (36) |  | (19) |  | (190) |
Recovery in other comprehensive income | — |  | — |  |  | 52 |  | — |  | — |  | 115 |  | 167 |
Acquisitions | (1,265) |  | (1,473) |  |  | — |  | 82 |  | — |  | (48) |  | (2,704) |
December 31, 2023 | (3,509) |  | (3,316) |  |  | (2) |  | 554 |  | (123) |  | 17 |  | (6,379) |
We have not recognized deferred tax assets for the following items:
| As at December 31
(In millions of dollars) | 2024 | 2023
Realized capital losses in Canada that can be applied against future capital gains | 73 |  | 73 |
Unrealized capital losses on debt and derivative instruments | 2,572 |  | 926 |
Tax losses in foreign jurisdictions 1 | 72 |  | 71 |
Deductible temporary differences in foreign jurisdictions | 44 |  | 41 |
Total unrecognized temporary differences | 2,761 |  | 1,111 |
1 $40 million of the tax losses in foreign jurisdictions expire between 2025 and 2037, the remaining $32 million can be carried forward indefinitely. There are taxable temporary differences associated with our investments in Canadian domestic subsidiaries. We do not recognize deferred tax liabilities for these temporary differences because we are able to control the timing of the reversal and the reversal is not probable in the foreseeable future. Reversing these taxable temporary differences is not expected to result in any significant tax implications.

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