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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2022
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:
|  | 2022 |  |  | 2021 |
Canadian statutory income tax rate |  |  | 26.5 | % |  |  | 26.5 | %
Net effect of losses not benefited |  |  | 7.7 |  |  |  | 1.8 |
Tax on repatriation of foreign earnings |  |  | 5.3 |  |  |  | 2.9 |
Impairment of investments [note 2] |  |  | 1.0 |  |  |  | — |
Foreign rate differentials |  |  | 0.6 |  |  |  | (3.9 | )
Reserve for uncertain tax positions |  |  | 0.4 |  |  |  | (2.5 | )
Foreign exchange re-measurement [i] |  |  | (0.6 | ) |  |  | 1.2 |
Re-measurement of deferred tax assets [ii] |  |  | (0.8 | ) |  |  | 1.5 |
Earnings of equity accounted investees |  |  | (1.6 | ) |  |  | (1.3 | )
Valuation allowance on deferred tax assets |  |  | (2.2 | ) |  |  | (0.7 | )
Deductible inflationary adjustments |  |  | (3.3 | ) |  |  | (1.2 | )
Research and development tax credits |  |  | (7.1 | ) |  |  | (3.4 | )
Others |  |  | 1.1 |  |  |  | (0.6 | )
Effective income tax rate |  |  | 27.0 | % |  |  | 20.3 | %
[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] | Includes the re-measurement of deferred tax assets of certain European subsidiaries in 2022 and a Chinese subsidiary in 2021.
Details of Income before Income Taxes by Jurisdiction |
[b] | The details of income before income taxes by jurisdiction are as follows:
|  | 2022 |  |  | 2021 |
Canadian |  | $ | (57 | ) |  | $ | 220 |
Foreign |  |  | 935 |  |  |  | 1,728 |
|  | $ | 878 |  |  | $ | 1,948 |
Details of Income Tax Provision |
[c] | The details of the income tax provision are as follows:
|  | 2022 |  |  | 2021 |
Current |  |  |  |  |  |  |  |
Canadian |  | $ | 5 |  |  | $ | 63 |
Foreign |  |  | 452 |  |  |  | 408 |
|  |  | 457 |  |  |  | 471 |
Deferred |  |  |  |  |  |  |  |
Canadian |  |  | (25 | ) |  |  | (4 | )
Foreign |  |  | (195 | ) |  |  | (72 | )
|  |  | (220 | ) |  |  | (76 | )
|  | $ | 237 |  |  | $ | 395 |
Summary of Deferred Income Taxes Provided on Temporary Differences |
[d] | Deferred income taxes have been provided on temporary differences, which consist of the following:
|  | 2022 |  |  | 2021 |
Liabilities currently not deductible for tax |  | $ | 17 |  |  | $ | 5 |
Net tax losses benefited |  |  | 10 |  |  |  | (22 | )
Re-measurement of deferred tax assets |  |  | (7 | ) |  |  | 28 |
Change in valuation allowance on deferred tax assets |  |  | (19 | ) |  |  | (13 | )
Tax depreciation (less than) in excess of book depreciation |  |  | (21 | ) |  |  | (30 | )
Tax on undistributed foreign earnings |  |  | (34 | ) |  |  | 43 |
Unrealized (loss) gain on remeasurement of investments |  |  | (48 | ) |  |  | 3 |
Book amortization in excess of tax amortization |  |  | (89 | ) |  |  | (58 | )
Others |  |  | (29 | ) |  |  | (32 | )
|  | $ | (220 | ) |  | $ | (76 | )
Summary of Deferred Tax Assets and Liabilities |
[e] | Deferred tax assets and liabilities consist of the following temporary differences:
|  | 2022 |  |  | 2021 |
Assets |  |  |  |  |  |  |  |
Tax benefit of loss carryforwards |  | $ | 760 |  |  | $ | 766 |
Operating lease liabilities |  |  | 367 |  |  |  | 409 |
Liabilities currently not deductible for tax |  |  | 269 |  |  |  | 219 |
Tax credit carryforwards |  |  | 87 |  |  |  | 84 |
Other assets tax value in excess of book values |  |  | 87 |  |  |  | — |
Unrealized loss on foreign exchange hedges and retirement liabilities |  |  | 70 |  |  |  | 59 |
Unrealized losses on remeasurement of investments |  |  | 37 |  |  |  | — |
Others |  |  | 29 |  |  |  | 30 |
|  |  | 1,706 |  |  |  | 1,567 |
Valuation allowance against tax benefit of loss carryforwards |  |  | (579 | ) |  |  | (586 | )
Other valuation allowance |  |  | (198 | ) |  |  | (125 | )
|  | $ | 929 |  |  | $ | 856 |
Liabilities |  |  |  |  |  |  |  |
Operating lease right-of-use assets |  |  | 372 |  |  |  | 415 |
Tax depreciation in excess of book depreciation |  |  | 186 |  |  |  | 228 |
Tax on undistributed foreign earnings |  |  | 171 |  |  |  | 206 |
Unrealized gain on foreign exchange hedges and retirement liabilities |  |  | 21 |  |  |  | 11 |
Unrealized gain on remeasurement of investments |  |  | — |  |  |  | 12 |
Other assets book value in excess of tax values |  |  | — |  |  |  | 3 |
|  |  | 750 |  |  |  | 875 |
Net deferred tax assets (liabilities) |  | $ | 179 |  |  | $ | (19 | )
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:
|  | 2022 |  |  | 2021 |
Long-term deferred tax assets |  | $ | 491 |  |  | $ | 421 |
Long-term deferred tax liabilities |  |  | (312 | ) |  |  | (440 | )
|  | $ | 179 |  |  | $ | (19 | )
Summary of Changes in Gross Unrecognized Tax Benefits |
[i] | As at December 31, 2022 and 2021, the Company’s gross unrecognized tax benefits were $142 million, respectively [excluding interest and penalties], of which $ 135 million and $ 126 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:
|  | 2022 |  |  | 2021 |
Balance, beginning of year |  | $ | 142 |  |  | $ | 182 |
Increase based on tax positions related to current year |  |  | 52 |  |  |  | 11 |
(Decrease) Increase based on tax positions of prior years |  |  | (17 | ) |  |  | 2 |
Settlements |  |  | (10 | ) |  |  | (5 | )
Foreign currency translation |  |  | (4 | ) |  |  | (5 | )
Statute expirations |  |  | (21 | ) |  |  | (43 | )
|  | $ | 142 |  |  | $ | 142 |

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