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INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2012

Summary of income tax rate

[a] The provision for income taxes differs from the expense that would be obtained by applying the Canadian statutory income tax rate as a result of the following:

		2012				2011				2010
Canadian statutory income tax rate			26.5	%			28.3	%			31.0	%
Manufacturing and processing profits deduction			(0.7	)			(0.8	)			(0.6	)
Foreign rate differentials			(1.5	)			(2.0	)			(4.2	)
Losses not benefited			5.8				11.4				3.3
Utilization of losses previously not benefited			(0.3	)			(10.2	)			(9.4	)
Earnings of equity accounted investees			(1.2	)			(1.6	)			(2.2	)
Investment tax credits			(2.3	)			(1.6	)			(1.3	)
Valuation allowance on deferred tax assets [i]			(5.0	)			(6.5	)			(0.3	)
Re-measurement gains			(1.1	)			—				—
Other			(1.7	)			(0.4	)			(0.1	)
Effective income tax rate			18.5	%			16.6	%			16.2	%

[i] Accounting standards require that the Company assess whether valuation allowances should be established or maintained against its deferred tax assets, based on consideration of all available evidence, using a more-likely-than-not recognition threshold. The factors the Company uses to assess the likelihood of realization are its history of losses, forecasts of future pre-tax income and tax planning strategies that could be implemented to realize the deferred tax assets.

Details of income before income taxes by jurisdiction

[b] The details of income before income taxes by jurisdiction are as follows:

		2012				2011				2010
Canadian		$	996			$	710			$	497
Foreign			754				507				700
		$	1,750			$	1,217			$	1,197

Details of income tax provision (recovery)

[c] The details of the income tax provision (recovery) are as follows:

		2012				2011				2010
Current
Canadian		$	170			$	115			$	73
Foreign			200				163				138
			370				278				211
Deferred
Canadian			(6	)			7				11
Foreign			(40	)			(83	)			(28	)
			(46	)			(76	)			(17	)
		$	324			$	202			$	194

Summary of deferred income taxes provided on temporary differences

[d] Deferred income taxes have been provided on temporary differences, which consist of the following:

		2012				2011				2010
Tax depreciation greater (less) than book depreciation		$	13			$	51			$	(13	)
Book amortization less than (in excess of) tax amortization			16				—				(20	)
Liabilities currently not deductible for tax			(29	)			(28	)			(27	)
Net tax losses (benefited) utilized			(11	)			(37	)			48
Change in valuation allowance on deferred tax assets			(89	)			(78	)			(3	)
Net tax credits utilized			53				24				—
Other			1				(8	)			(2	)
		$	(46	)		$	(76	)		$	(17	)

Summary of deferred tax assets and liabilities

[e] Deferred tax assets and liabilities consist of the following temporary differences:

		2012				2011
Assets
Tax benefit of loss carryforwards		$	628			$	527
Liabilities currently not deductible for tax			263				219
Tax credit carryforwards			35				73
Unrealized loss on cash flow hedges and retirement liabilities			48				51
			974				870
Valuation allowance against tax benefit of loss carryforwards			(504	)			(454	)
Other valuation allowance			(45	)			(103	)
			425				313
Liabilities
Tax depreciation in excess of book depreciation			199				135
Other assets book value in excess of tax value			77				20
Unrealized gain on cash flow hedges and retirement liabilities			19				8
Other			30				—
			325				163
Net deferred tax assets		$	100			$	150

Net deferred tax assets presented on the Consolidated Balance Sheet

The net deferred tax assets are presented on the consolidated balance sheet in the following categories:

		2012				2011
Current deferred tax assets		$	170			$	206
Current deferred tax liabilities			(19	)			(44	)
Long-term deferred tax assets			90				69
Long-term deferred tax liabilities			(141	)			(81	)
		$	100			$	150

Summary of the changes in gross unrecognized tax benefits

A summary of the changes in gross unrecognized tax benefits is as follows:

		2012				2011
Balance, beginning of year		$	252			$	257
Additions based on tax positions related to current year			68				14
(Reductions)/additions based on tax positions of prior years			(31	)			13
Settlements			(10	)			(12	)
Statute expirations			(5	)			(16	)
Foreign currency translation			5				(4	)
		$	279			$	252

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Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years.

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