INCOME TAXES

12 Months Ended

Mar. 31, 2022

Income tax expense

The reconciliation of income taxes at Canadian statutory rates with the reported income taxes is as follows:



		2022			2021
Earnings (loss) before income taxes	$	153.6		$	(87.2)
Canadian statutory income tax rates		26.54	%		26.53	%
Income taxes at Canadian statutory rates	$	40.8		$	(23.1)
Effect of differences in tax rates in other jurisdictions		(16.8)			(5.8)
Unrecognized tax benefits and tax benefits not previously recognized		2.2			3.2
Non-deductible expenses (non-taxable revenues)		1.5			(4.8)
Tax impact on after-tax profit of equity accounted investees		(12.1)			(1.1)
Prior years' tax adjustments		(1.5)			(6.3)
Other		(10.5)			(1.8)
Income tax expense (recovery)	$	3.6		$	(39.7)

The Company's applicable tax rate corresponds to the combined Canadian tax rates applicable in the provinces where the Company operates. The increase is due to a change in the allocation of income in the jurisdictions it operates.

Significant components of the provision for the income tax expense are as follows:



		2022		2021
Current income tax expense (recovery):
Current year	$	30.4	$	8.6
Prior years' tax adjustments		3.1		(15.0)
Deferred income tax (recovery) expense:
Tax benefit not previously recognized used to reduce the deferred tax expense		(4.1)		(5.2)
Change in income tax rates		(6.6)		(0.8)
Origination and reversal of temporary differences		(19.2)		(27.3)

Income tax expense (recovery)	$	3.6	$	(39.7)

Deferred tax assets and liabilities

During the year ended March 31, 2022, movements in temporary differences are as follows:






															Foreign
	Balance												currency
	beginning		Recognized			Recognized			Recognized			Business			exchange			Balance
	of year		in income				in OCI		in equity	combinations			differences			end of year
Non-capital loss carryforwards	$	48.1		$	48.3		$	—		$	—		$	0.2		$	0.3	$	96.9

Unclaimed research & development expenditures	70.8			15.9			—			—			(0.1)			—		86.6
Capital loss carryforwards	1.1			1.0			—			—			2.3			—		4.4
Investment tax credits	(76.4)			(9.0)			—			—			—			—		(85.4)
Property, plant and equipment and right-of-use of assets	(75.2)			(6.5)			—			—			(4.6)			0.1		(86.2)
Intangible assets	(92.5)			8.3			—			—			(5.9)			(0.1)		(90.2)
Deferred revenues, contract assets and contract liabilities	1.5			(42.2)			—			—			41.6			0.3		1.2
Foreign currency exchange difference	(1.4)			9.2			(4.9)			—			—			(0.3)		2.6
Derivative financial assets and liabilities	(6.5)			6.2			0.6			—			—			(0.5)		(0.2)
Defined benefit obligation	57.2			4.3			(33.4)			—			—			(0.9)		27.2
Amounts not currently deductible	65.0			4.6			—			—			13.5			—		83.1
Other	(10.3)			(10.2)			—			3.7			—			0.5		(16.3)
Net deferred tax assets (liabilities)	$	(18.6)		$	29.9		$	(37.7)		$	3.7		$	47.0		$	(0.6)	$	23.7

During the year ended March 31, 2021, movements in temporary differences are as follows:






																	Foreign
	Balance															currency
	beginning		Recognized				Recognized			Recognized			Business			exchange				Balance
	of year			in income				in OCI		in equity			combinations			differences			end of year
Non-capital loss carryforwards	$	33.4			$	12.0		$	—		—			$	2.4		$	0.3		$	48.1
Unclaimed research & development expenditures	64.4				5.8			—			—			0.6			—			70.8
Capital loss carryforwards	1.4				(0.3)			—			—			—			—			1.1
Investment tax credits	(70.0)				(6.4)			—			—			—			—			(76.4)
Property, plant and equipment and right-of-use of assets	(88.4)				(5.8)			—			—			6.9			12.1			(75.2)
Intangible assets	(93.0)				9.0			—			—			(11.5)			3.0			(92.5)
Deferred revenues, contract assets and contract liabilities	(15.9)				6.4			—			—			11.2			(0.2)			1.5
Foreign currency exchange difference	(2.3)				2.7			(1.6)			—			—			(0.2)			(1.4)
Derivative financial assets and liabilities	25.5				(18.9)			(13.0)			—			—			(0.1)			(6.5)
Defined benefit obligation	53.1				4.5			(0.3)			—			—			(0.1)			57.2
Amounts not currently deductible	42.7				33.2			—			—			(8.9)			(2.0)			65.0
Other	(17.0)				(8.9)			—			15.7			—			(0.1)			(10.3)
Net deferred tax (liabilities) assets	$	(66.1)			$	33.3		$	(14.9)		$	15.7		$	0.7		$	12.7		$	(18.6)

As at March 31, 2022, net deferred tax assets of $88.7 million (2021 – $85.8 million) were recognized in jurisdictions that incurred losses this fiscal year or the preceding fiscal year. Based upon the level of historical taxable income or projections for future taxable income, management believes it is probable that the Company will realize the benefits of these net deferred tax assets.

As at March 31, 2022, a deferred income tax liability on taxable temporary differences of $2,468.6 million (2021 – $2,439.9 million) related to investments in subsidiaries and interests in joint ventures has not been recognized, because the Company controls whether the liability will be incurred and it is satisfied that it will not be incurred in the foreseeable future.

The non-capital losses incurred in various jurisdictions expire as follows:


Expiry date	Unrecognized		Recognized






2023-2027	$	29.1	$	18.4
2028-2041		27.5		198.7
No expiry date		144.6		165.0
	$	201.2	$	382.1

As at March 31, 2022, the Company has $118.8 million (2021 – $107.4 million) of deductible temporary differences for which deferred tax assets have not been recognized. These amounts will reverse during a period of up to 25 years.