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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2022
Disclosure of income tax [Abstract] |
Components of income tax expense | Components of Income Tax Expense
| 2022 | 2021
Current tax expense (recovery) |  |
Recognized in profit or loss in current year | $ | 85,325 |  | $ | 134,947 |
Adjustments recognized in the current year with respect to prior years | (2,308) |  | 147 |
| 83,017 |  | 135,094 |
Deferred tax expense (recovery) |  |
Deferred tax expense (recovery) recognized in the current year | (34,184) |  | 14,194 |
Adjustments recognized in the current year with respect to prior years | 366 |  | 56 |
Derecognition of previously unrecognized deferred tax assets | 9,065 |  | — |
Benefit from previously unrecognized losses, and other temporary differences | — |  | 508 |
Impact of impairments on deferred tax assets and liabilities | (3,825) |  | — |
Decrease in deferred tax liabilities due to tax impact of NRV charge to inventory | (15,321) |  | (3,423) |
| (43,899) |  | 11,335 |
Income tax expense | $ | 39,118 |  | $ | 146,429 |
Reconciliation of effective income tax rate | Reconciliation of Effective Income Tax Rate
| 2022 | 2021
Earnings (loss) before taxes and non-controlling interest | $ | (300,945) |  | $ | 244,991 |
Statutory Canadian income tax rate | 27.00 | % | 27.00 | %
Income tax expense (recovery) based on above rates | $ | (81,255) |  | $ | 66,148 |
Increase (decrease) due to: |  |
Non-deductible expenditures | 7,465 |  | 6,192 |
Foreign tax rate differences | (11,717) |  | 15,969 |
Change in net deferred tax assets not recognized (1) | 22,296 |  | 20,574 |
Derecognition of deferred tax assets previously recognized (2) | 50,356 |  | — |
Effect of other taxes paid (mining and withholding) | 15,658 |  | 25,846 |
Effect of foreign exchange on tax expense | (21,541) |  | 14,337 |
Non-taxable impact of foreign exchange | 6,310 |  | (1,203) |
Change in non-deductible portion of reclamation liabilities | 12,157 |  | 2,380 |
Unrecognized tax benefit on termination fee related to the Yamana acquisition | 39,750 |  | — |
Other | (361) |  | (3,814) |
Income tax expense | $ | 39,118 |  | $ | 146,429 |
Effective income tax rate | (13.00) | % | 59.77 | %
(1)Includes deferred taxes related to amounts recorded in other comprehensive income for the year-end December 31, 2022 of $0.5 million with no amounts recognized in the comparative period. (2)Attributable to the loss of attributes resulting from the Dolores impairment in Q2 2022 (Note 12).
Analysis of deferred tax assets and liabilities | The following is the analysis of the deferred tax assets (liabilities) presented in the consolidated financial statements:
| 2022 | 2021
Net deferred tax liabilities, beginning of year | $ | (128,832) |  | $ | (117,461) |
Recognized in net earnings in the year | 43,899 |  | (11,335) |
Recognized in other comprehensive income (loss) in year (1) | 469 |  | — |
Other | 6 |  | (36) |
Net deferred liabilities, end of year | (84,458) |  | (128,832) |
Deferred tax assets | 55,879 |  | 55,953 |
Deferred tax liabilities | (140,337) |  | (184,785) |
Net deferred tax liabilities | $ | (84,458) |  | $ | (128,832) |
(1)Deferred tax impact related to unrealized loss on long-term investment (see Note 13).
Components of deferred tax assets and liabilities | The deferred tax assets (liabilities) are comprised of the various temporary differences, as detailed below:
| 2022 | 2021
Deferred tax assets (liabilities) arising from: |  |
Closure and decommissioning costs | $ | 23,482 |  | $ | 27,742 |
Tax losses, resource pools and mining tax credits | 83,819 |  | 92,928 |
Deductible Mexican mining taxes | 3,974 |  | 4,682 |
Accounts payable and accrued liabilities | 26,920 |  | 22,119 |
Trade and other receivables | 17,634 |  | 29,163 |
Provision for doubtful debts and inventory adjustments | 3,136 |  | (28,153) |
Short-term investments | (11,665) |  | (7,941) |
Mineral properties, plant, and equipment | (217,255) |  | (245,126) |
Estimated sales provisions | (19,263) |  | (30,466) |
Other temporary differences and provisions | 4,760 |  | 6,220 |
Net deferred tax liabilities | $ | (84,458) |  | $ | (128,832) |
At December 31, 2022, the net deferred tax liability above included the deferred tax asset of $83.8 million, which includes the benefits from tax losses ($28.1 million) and resource pools ($55.7 million). The decrease of $9.1 million in this deferred tax asset is mainly due to the slower than expected utilization of tax attributes against income from Timmins West and Bell Creek, which resulted in the de-recognition of the benefits associated with resource pools for these mines. The losses will begin to expire after the 2024 year end, if unused. 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 in this deferred tax asset is mainly due to the unrealized losses on short-term investments. In prior years, the accumulated unrealized gains on short-term investments necessitated the recognition of this offsetting deferred tax asset. The current year's decrease in accumulated unrealized gains has resulted in a consequential reduction to this offsetting deferred tax asset. Since the accumulated unrealized gains decreased during 2021, the benefit associated with the offsetting losses was de-recognized. 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:
| 2022 | 2021
Operating tax loss | $ | 383,231 |  | $ | 366,351 |
Net capital tax loss | 36,817 |  | 35,801 |
Resource pools and other tax credits (1) | 87,012 |  | 49,230 |
Financing fees | 1,368 |  | 1,050 |
Mineral properties, plant, and equipment | 207,182 |  | 127,945 |
Closure and decommissioning costs | 207,261 |  | 143,080 |
Exploration and other expenses not currently deductible | 26,300 |  | 33,837 |
Intercompany debt | 23,449 |  | 17,956 |
Doubtful debt and inventory | 18,631 |  | 24,624 |
Payroll and vacation accruals | 35,799 |  | 6,168 |
Other temporary differences | 14,057 |  | 6,154 |
| $ | 1,041,107 |  | $ | 812,196 |
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, 2022 |  |  |  |  |  |  |
| Canada | US | Peru | Mexico | Barbados | Argentina | Total
2023 | $ | — |  | $ | 360 |  | $ | — |  | $ | 289 |  | $ | 70 |  | $ | 4 |  | $ | 723 |
2024 | — |  | 419 |  | 275 |  | 312 |  | 30 |  | 10 |  | 1,046 |
2025 – and after | 342,244 |  | 10,980 |  | 271 |  | 2,320 |  | 318 |  | 25,329 |  | 381,462 |
Total tax losses | $ | 342,244 |  | $ | 11,759 |  | $ | 546 |  | $ | 2,921 |  | $ | 418 |  | $ | 25,343 |  | 383,231 |
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 |

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