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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2021
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:
|  | 2021 |  |  | 2020 |
Canadian statutory income tax rate |  |  | 26.5 | % |  |  | 26.5 | %
Tax on repatriation of foreign earnings |  |  | 2.9 |  |  |  | 4.4 |
Net effect of losses not benefited |  |  | 1.8 |  |  |  | 8.1 |
Re-measurement of deferred tax assets [i] |  |  | 1.5 |  |  |  | — |
Foreign exchange re-measurement [ii] |  |  | 1.2 |  |  |  | 3.4 |
Impairment of investments [note 2] |  |  | — |  |  |  | 8.6 |
Manufacturing and processing profits deduction |  |  | (0.2 | ) |  |  | (0.1 | )
Valuation allowance on deferred tax assets |  |  | (0.7 | ) |  |  | 0.6 |
Earnings of equity accounted investees |  |  | (1.3 | ) |  |  | (3.6 | )
Reserve for uncertain tax positions |  |  | (2.5 | ) |  |  | (4.0 | )
Research and development tax credits |  |  | (3.4 | ) |  |  | (3.7 | )
Foreign rate differentials |  |  | (3.9 | ) |  |  | (7.3 | )
Others |  |  | (1.6 | ) |  |  | (0.2 | )
Effective income tax rate |  |  | 20.3 | % |  |  | 32.7 | %
[i] | Re-measurement of deferred tax assets of a China subsidiary .
[ii] | 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.
Details of Income before Income Taxes by Jurisdiction |
[b] | The details of income before income taxes by jurisdiction are as follows:
|  | 2021 |  |  | 2020 |
Canadian |  | $ | 220 |  |  | $ | 93 |
Foreign |  |  | 1,728 |  |  |  | 913 |
|  | $ | 1,948 |  |  | $ | 1,006 |
Details of Income Tax Provision |
[c] | The details of the income tax provision are as follows:
|  | 2021 |  |  | 2020 |
Current |  |  |  |  |  |  |  |
Canadian |  | $ | 63 |  |  | $ | 10 |
Foreign |  |  | 408 |  |  |  | 302 |
|  |  | 471 |  |  |  | 312 |
Deferred |  |  |  |  |  |  |  |
Canadian |  |  | (4 | ) |  |  | 17 |
Foreign |  |  | (72 | ) |  |  | — |
|  |  | (76 | ) |  |  | 17 |
|  | $ | 395 |  |  | $ | 329 |
Summary of Deferred Income Taxes Provided on Temporary Differences |
[d] | Deferred income taxes have been provided on temporary differences, which consist of the following:
|  | 2021 |  |  | 2020 |
Tax on undistributed foreign earnings |  | $ | 43 |  |  | $ | 23 |
Re-measurement of deferred tax assets |  |  | 28 |  |  |  | — |
Liabilities currently not deductible for tax |  |  | 5 |  |  |  | (2 | )
Change in valuation allowance on deferred tax assets |  |  | (13 | ) |  |  | 6 |
Net tax losses benefited |  |  | (22 | ) |  |  | (38 | )
Tax depreciation (less than) in excess of book depreciation |  |  | (30 | ) |  |  | 50 |
Book amortization in excess of tax amortization |  |  | (58 | ) |  |  | (17 | )
Others |  |  | (29 | ) |  |  | (5 | )
|  | $ | (76 | ) |  | $ | 17 |
Summary of Deferred Tax Assets and Liabilities |
[e] | Deferred tax assets and liabilities consist of the following temporary differences:
|  | 2021 |  |  | 2020 |
Assets |  |  |  |  |  |  |  |
Tax benefit of loss carryforwards |  | $ | 766 |  |  | $ | 735 |
Operating lease liabilities |  |  | 409 |  |  |  | 469 |
Liabilities currently not deductible for tax |  |  | 219 |  |  |  | 259 |
Tax credit carryforwards |  |  | 84 |  |  |  | 64 |
Unrealized loss on foreign exchange hedges and retirement liabilities |  |  | 59 |  |  |  | 87 |
Others |  |  | 30 |  |  |  | 46 |
|  | 1,567 |  |  | 1,660 |
Valuation allowance against tax benefit of loss carryforwards |  |  | (586 | ) |  |  | (569 | )
Other valuation allowance |  |  | (125 | ) |  |  | (206 | )
|  | $ | 856 |  |  | $ | 885 |
Liabilities |  |  |  |  |  |  |  |
Operating lease right-of-use assets |  |  | 415 |  |  |  | 470 |
Tax depreciation in excess of book depreciation |  |  | 228 |  |  |  | 239 |
Tax on undistributed foreign earnings |  |  | 206 |  |  |  | 163 |
Unrealized gain on remeasurement of investments |  |  | 12 |  |  |  | 11 |
Unrealized gain on foreign exchange hedges and retirement liabilities |  |  | 11 |  |  |  | 17 |
Other assets book value in excess of tax values |  |  | 3 |  |  |  | 65 |
|  |  | 875 |  |  |  | 965 |
Net deferred tax liabilities |  | $ | (19 | ) |  | $ | (80 | )
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:
|  | 2021 |  |  | 2020 |
Long-term deferred tax assets |  | $ | 421 |  |  | $ | 372 |
Long-term deferred tax liabilities |  |  | (440 | ) |  |  | (452 | )
|  | $ | (19 | ) |  | $ | (80 | )
Summary of Changes in Gross Unrecognized Tax Benefits |
[i] | As at December 31, 2021 and 2020, the Company’s gross unrecognized tax benefits were $142 million and $182 million, respectively [excluding interest and penalties], of which $126 million and $165 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:
|  | 2021 |  |  | 2020 |
Balance, beginning of year |  | $ | 182 |  |  | $ | 192 |
Increase based on tax positions related to current year |  |  | 11 |  |  |  | 27 |
Increase based on tax positions of prior years |  |  | 2 |  |  |  | — |
Increase related to acquisitions |  |  | — |  |  |  | 11 |
Settlements |  |  | (5 | ) |  |  | (1 | )
Foreign currency translation |  |  | (5 | ) |  |  | 5 |
Statute expirations |  |  | (43 | ) |  |  | (52 | )
|  | $ | 142 |  |  | $ | 182 |

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