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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2021
Disclosure of income tax [Abstract] |
Components of income tax expense | Components of Income Tax Expense
| 2021 | 2020
Current tax expense (recovery) |  |
Recognized in profit or loss in current year | $ | 134,947 |  | $ | 99,013 |
Adjustments recognized in the current year with respect to prior years | 147 |  | (658) |
| 135,094 |  | 98,355 |
Deferred tax expense (recovery) |  |
Deferred tax recovery recognized in the current year | 14,194 |  | 14,667 |
Adjustments recognized in the current year with respect to prior years | 56 |  | 433 |
Benefit from previously unrecognized losses, and other temporary differences | 508 |  | (42,379) |
Decrease in deferred tax liabilities due to tax impact of NRV charge to inventory | (3,423) |  | 4,481 |
| 11,335 |  | (22,798) |
Income tax expense | $ | 146,429 |  | $ | 75,557 |
Reconciliation of effective income tax rate | Reconciliation of Effective Income Tax Rate
| 2021 | 2020
Earnings before taxes and non-controlling interest | $ | 244,991 |  | $ | 252,012 |
Statutory Canadian income tax rate | 27.00 | % | 27.00 | %
Income tax expense based on above rates | $ | 66,148 |  | $ | 68,043 |
Increase (decrease) due to: |  |
Non-deductible expenditures | 6,192 |  | 9,915 |
Foreign tax rate differences | 15,969 |  | 16,179 |
Change in net deferred tax assets not recognized | 20,574 |  | (64,765) |
Non-taxable portion of net earnings of affiliates | (1,304) |  | — |
Effect of other taxes paid (mining and withholding) | 25,846 |  | 22,545 |
Effect of foreign exchange on tax expense | 14,337 |  | 18,598 |
Non-taxable impact of foreign exchange | (1,203) |  | (3,000) |
Change in non-deductible portion of reclamation liabilities | 2,380 |  | 8,605 |
Other | (2,510) |  | (563) |
Income tax expense | $ | 146,429 |  | $ | 75,557 |
Analysis of deferred tax assets and liabilities | The following is the analysis of the deferred tax assets (liabilities) presented in the consolidated financial statements:
| 2021 | 2020
Net deferred tax liabilities, beginning of year | $ | (117,461) |  | $ | (140,361) |
Recognized in net earnings in the year | (11,335) |  | 22,798 |
Other | (36) |  | 102 |
Net deferred liabilities, end of year | (128,832) |  | (117,461) |
Deferred tax assets | 55,953 |  | 57,850 |
Deferred tax liabilities | (184,785) |  | (175,311) |
Net deferred tax liabilities | $ | (128,832) |  | $ | (117,461) |
Components of deferred tax assets and liabilities | The deferred tax assets (liabilities) are comprised of the various temporary differences, as detailed below:
| 2021 | 2020
Deferred tax assets (liabilities) arising from: |  |
Closure and decommissioning costs | $ | 27,742 |  | $ | 26,482 |
Tax losses, resource pools and mining tax credits | 92,928 |  | 140,608 |
Deductible Mexican mining taxes | 4,682 |  | 3,286 |
Accounts payable and accrued liabilities | 22,119 |  | 17,737 |
Trade and other receivables | 29,163 |  | 13,290 |
Provision for doubtful debts and inventory adjustments | (28,153) |  | (21,354) |
Short-term investments | (7,941) |  | (15,649) |
Mineral properties, plant, and equipment | (245,126) |  | (274,483) |
Estimated sales provisions | (30,466) |  | (14,028) |
Other temporary differences and provisions | 6,220 |  | 6,650 |
Net deferred tax liabilities | $ | (128,832) |  | $ | (117,461) |
At December 31, 2021, the net deferred tax liability above included the deferred tax asset of $92.9 million, which includes the benefits from tax losses ($26.4 million) and resource pools ($66.5 million). The decrease of $47.7 million in this deferred tax asset is mainly due to the unrealized losses on short-term investments. These unrealized mark-to-market losses in 2021 reduced the offsetting operating losses recognized, whereas in 2020, additional operating losses were recognized to offset the unrealized mark-to-market gains. The losses will begin to expire after the 2024 year end, if unused. At December 31, 2020, the net deferred tax liability above included the deferred tax asset of $140.6 million, which includes the benefits from tax losses ($43.8 million) and resource pools ($96.8 million). The increase in this deferred tax asset is mainly due to the Timmins and Bell Creek mines - the assets added were related to previously unbenefitted deductible resource pools, partially offset by losses utilized against taxable income earned. The losses will begin to expire after the 2024 year end, if unused.
Deductible temporary differences, unused tax losses and unused tax credits for which no deferred tax assets have been recognised | Deductible temporary differences, unused tax losses and unused tax credits for which no deferred tax assets have been recognized are attributable to the following:
| 2021 | 2020
Operating tax loss | $ | 366,351 |  | $ | 284,626 |
Net capital tax loss | 35,801 |  | 32,378 |
Resource pools and other tax credits (1) | 49,230 |  | 48,773 |
Financing fees | 1,050 |  | 2,003 |
Mineral properties, plant, and equipment (2) | 127,945 |  | 107,124 |
Closure and decommissioning costs | 143,080 |  | 136,728 |
Exploration and other expenses not currently deductible (2) | 33,837 |  | 68,266 |
Intercompany debt | 17,956 |  | 12,160 |
Doubtful debt and inventory | 24,624 |  | 41,378 |
Payroll and vacation accruals | 6,168 |  | 1,491 |
Other temporary differences | 6,154 |  | 3,562 |
| $ | 812,196 |  | $ | 738,489 |
Schedule of operating loss carryforwards | Included in the above amounts are operating tax losses, which if not utilized will expire as follows:
At December 31, 2021 |  |  |  |  |  |  |
| Canada | US | Peru | Mexico | Barbados | Argentina | Total
2022 | $ | — |  | $ | 529 |  | $ | 156 |  | $ | — |  | $ | 15 |  | $ | 3 |  | $ | 703 |
2023 | — |  | 360 |  | — |  | 207 |  | 60 |  | 5 |  | 632 |
2024 – and after | 330,799 |  | 11,399 |  | 593 |  | 2,092 |  | 168 |  | 19,965 |  | 365,016 |
Total tax losses | $ | 330,799 |  | $ | 12,288 |  | $ | 749 |  | $ | 2,299 |  | $ | 243 |  | $ | 19,973 |  | 366,351 |
At December 31, 2020 |  |  |  |  |  |
| Canada | US | Peru | Mexico | Barbados | Argentina | Total
2021 | $ | — |  | $ | 317 |  | $ | 26 |  | $ | — |  | $ | 8 |  | $ | 1 |  | $ | 352 |
2022 | — |  | 529 |  | — |  | — |  | 12 |  | 3 |  | 544 |
2023 – and after | 269,001 |  | 11,746 |  | 314 |  | 2,406 |  | 183 |  | 80 |  | 283,730 |
Total tax losses | $ | 269,001 |  | $ | 12,592 |  | $ | 340 |  | $ | 2,406 |  | $ | 203 |  | $ | 84 |  | $ | 284,626 |

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