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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2020
Income Tax Disclosure [Abstract] |
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:
|  | 2020 |  |  | 2019 |
Canadian statutory income tax rate |  |  | 26.5 | % |  |  | 26.5 | %
Impairment of investments [note 2] |  |  | 8.6 |  |  |  | 8.2 |
Net effect of losses not benefited |  |  | 8.1 |  |  |  | 0.8 |
Tax on repatriation of foreign earnings |  |  | 4.4 |  |  |  | 1.9 |
Foreign exchange re-measurement [i] |  |  | 3.4 |  |  |  | 0.1 |
Valuation allowance on deferred tax assets |  |  | 0.6 |  |  |  | — |
Non-taxable capital losses (gains) [ii] |  |  | 0.5 |  |  |  | (2.5 | )
Manufacturing and processing profits deduction |  |  | (0.1 | ) |  |  | (0.4 | )
Earnings of equity accounted investees |  |  | (3.6 | ) |  |  | (1.3 | )
Research and development tax credits |  |  | (3.7 | ) |  |  | (2.4 | )
Reserve for uncertain tax positions |  |  | (4.0 | ) |  |  | (0.5 | )
Foreign rate differentials |  |  | (7.3 | ) |  |  | (3.3 | )
Others |  |  | (0.7 | ) |  |  | (0.5 | )
Effective income tax rate |  |  | 32.7 | % |  |  | 26.6 | %
[i] | Includes foreign exchange gains reported on U.S. dollar denominated assets for Mexican tax purposes that are not recognized for GAAP purposes and losses related to the re-measurement of financial statement balances of foreign subsidiaries, primarily in Mexico, that are maintained in a currency other than their functional currency.
[ii] | During the year ended December 31, 2019, the Company had non-taxable capital gains mainly related to the sale of the FP&C business [note 2].
Details of Income before Income Taxes by Jurisdiction |
[b] | The details of income before income taxes by jurisdiction are as follows:
|  | 2020 |  |  | 2019 |
Canadian |  | $ | 93 |  |  | $ | 583 |
Foreign |  |  | 913 |  |  |  | 1,640 |
|  | $ | 1,006 |  |  | $ | 2,223 |
Details of Income Tax Provision | [c] The details of the income tax provision are as follows:
|  | 2020 |  |  | 2019 |
Current |  |  |  |  |  |  |  |
Canadian |  | $ | 10 |  |  | $ | 117 |
Foreign |  |  | 302 |  |  |  | 467 |
|  |  | 312 |  |  |  | 584 |
Deferred |  |  |  |  |  |  |  |
Canadian |  |  | 17 |  |  |  | 3 |
Foreign |  |  | — |  |  |  | 4 |
|  |  | 17 |  |  |  | 7 |
|  | $ | 329 |  |  | $ | 591 |
Summary of Deferred Income Taxes Provided on Temporary Differences |
[d] | Deferred income taxes have been provided on temporary differences, which consist of the following:
|  | 2020 |  |  | 2019 |
Tax depreciation in excess of book depreciation |  | $ | 50 |  |  | $ | 7 |
Tax on undistributed foreign earnings |  |  | 23 |  |  |  | 1 |
Change in valuation allowance on deferred tax assets |  |  | 6 |  |  |  | 1 |
Liabilities currently not deductible for tax |  |  | (2 | ) |  |  | (43 | )
Book amortization (in excess of) less than tax amortization |  |  | (17 | ) |  |  | 43 |
Net tax losses benefited |  |  | (38 | ) |  |  | 29 |
Others |  |  | (5 | ) |  |  | (31 | )
|  | $ | 17 |  |  | $ | 7 |
Summary of Deferred Tax Assets and Liabilities |
[e] | Deferred tax assets and liabilities consist of the following temporary differences:
|  | 2020 |  |  | 2019 |
Assets |  |  |  |  |  |  |  |
Tax benefit of loss carryforwards |  | $ | 735 |  |  | $ | 622 |
Operating lease liabilities |  |  | 469 |  |  |  | 452 |
Liabilities currently not deductible for tax |  |  | 259 |  |  |  | 234 |
Unrealized loss on foreign exchange hedges and retirement liabilities |  |  | 87 |  |  |  | 69 |
Tax credit carryforwards |  |  | 64 |  |  |  | 70 |
Others |  |  | 46 |  |  |  | 41 |
|  |  | 1,660 |  |  |  | 1,488 |
Valuation allowance against tax benefit of loss carryforwards |  |  | (569 | ) |  |  | (515 | )
Other valuation allowance |  |  | (206 | ) |  |  | (170 | )
|  | $ | 885 |  |  | $ | 803 |
Liabilities |  |  |  |  |  |  |  |
Operating lease right-of-use assets |  |  | 470 |  |  |  | 447 |
Tax depreciation in excess of book depreciation |  |  | 239 |  |  |  | 242 |
Tax on undistributed foreign earnings |  |  | 163 |  |  |  | 137 |
Other assets book value in excess of tax values |  |  | 65 |  |  |  | 66 |
Unrealized gain on foreign exchange hedges and retirement liabilities |  |  | 17 |  |  |  | 18 |
Unrealized gain on remeasurement of investments |  |  | 11 |  |  |  | 4 |
|  | 965 |  |  | 914 |
Net deferred tax liabilities |  | $ | (80 | ) |  | $ | ( 111 | )
Net Deferred Tax Liabilities Presented on Consolidated Balance Sheet | The net deferred tax liabilities are presented on the consolidated balance sheet in the following categories:
|  | 2020 |  |  | 2019 |
Long-term deferred tax assets |  | $ | 372 |  |  | $ | 308 |
Long-term deferred tax liabilities |  |  | (452 | ) |  |  | (419 | )
|  | $ | (80 | ) |  | $ | (111 | )
Summary of Changes in Gross Unrecognized Tax Benefits |
[i] | As at December 31, 2020 and 2019, the Company’s gross unrecognized tax benefits were $182 million and $192 million, respectively [excluding interest and penalties], of which $165 million and $174 million, respectively, if recognized, would affect the Company’s effective tax rate. The gross unrecognized tax benefits differ from the amount that would affect the Company’s effective tax rate due primarily to the impact of the valuation allowance on deferred tax assets. A summary of the changes in gross unrecognized tax benefits is as follows:
|  | 2020 |  |  | 2019 |
Balance, beginning of year |  | $ | 192 |  |  | $ | 198 |
Increase based on tax positions related to current year |  |  | 27 |  |  |  | 21 |
Decrease based on tax positions of prior years |  |  | — |  |  |  | (2 | )
Increase related to acquisitions |  |  | 11 |  |  |  | 3 |
Settlements |  |  | (1 | ) |  |  | (4 | )
Statute expirations |  |  | (52 | ) |  |  | (21 | )
Foreign currency translation |  |  | 5 |  |  |  | (3 | )
|  | $ | 182 |  |  | $ | 192 |

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