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Note 12 - Income Tax
 12 Months Ended
Dec. 31, 2016
Notes to Financial Statements  
Income Tax Disclosure [Text Block]
12.
Income tax
 
Income tax differs from the amounts that would be obtained by applying the statutory rate to the respective year’s earnings before tax. Differences result from the following items:
 
   
2016
  
2015
         
Income tax expense using combined statutory rate of 26.5% (2015 - 26.5%, 2014 - 26.5%)
  
$
21,632
    
$
16,326
  
Permanent differences
    
434
      
488
  
Tax effect of flow through entities
    
(243
)
    
(230
)
Impact of changes in foreign exchange rates
    
-
      
(10
)
Adjustments to tax liabilities for prior periods
    
(456
)
    
1,393
  
Effects of changes in enacted tax rates
    
-
      
(42
)
Changes in liability for unrecognized tax benefits
    
(156
)
    
(130
)
Foreign, state and provincial tax rate differential
    
5,699
      
3,750
  
Gain on disposition of preferred shares
    
-
      
1,246
  
Other taxes
    
477
      
(161
)
Change in valuation allowances
    
-
      
782
  
Provision for income taxes as reported
  
$
27,387
    
$
23,412
  
 
Earnings before income tax by jurisdiction comprise the following:
 
   
2016
  
2015
         
Canada
  
$
16,989
    
$
8,590
  
United States
    
64,641
      
53,020
  
Total
  
$
81,630
    
$
61,610
  
 
Income tax expense (recovery) comprises the following:
 
   
2016
  
2015
         
Current
                
Canada
  
$
3,689
    
$
829
  
United States
    
21,945
      
10,757
  
     
25,634
      
11,586
  
                 
Deferred
                
Canada
    
(317
)
    
1,352
  
United States
    
2,070
      
10,474
  
     
1,753
      
11,826
  
                 
Total
  
$
27,387
    
$
23,412
  
 
  
The significant components of deferred income tax are as follows:
 
   
2016
  
2015
         
Deferred income tax assets
                
Loss carry-forwards
  
$
1,066
    
$
6,071
  
Expenses not currently deductible
    
18,120
      
13,245
  
Stock-based compensation
    
2,956
      
2,420
  
Basis differences of partnerships and other entities
    
1,047
      
925
  
Allowance for doubtful accounts
    
3,457
      
2,967
  
Inventory and other reserves
    
542
      
548
  
     
27,188
      
26,176
  
                 
Deferred income tax liabilities
                
Depreciation and amortization
    
31,168
      
13,971
  
Prepaid and other expenses deducted for tax purposes
    
1,942
      
1,782
  
     
33,110
      
15,753
  
                 
Net deferred income tax asset (liability) before valuation allowance
    
(5,922
)
    
10,423
  
Valuation allowance
    
756
      
783
  
                 
Net deferred income tax asset (liability)
  
$
(6,678
)
  
$
9,640
  
 
The recoverability of deferred income tax assets is dependent on generating sufficient taxable income before the
20
year loss carry-forward limitation. Although realization is not assured, the Company believes it is more likely than not that the deferred tax asset will be realized. The amount of the deferred tax asset considered realizable, however, could be reduced in the near term if estimates of future taxable income during the carry-forward period are reduced.
 
The Company has gross operating loss carry-forwards as follows:
 
   
Loss carry forward
  
Gross losses not recognized
  
Net
   
2016
  
2015
  
2016
  
2015
  
2016
  
2015
                         
Canada
  
$
2,082
    
$
3,234
    
$
-
    
$
-
    
$
2,082
    
$
3,234
  
United States
    
7,902
      
21,472
      
6,470
      
6,470
      
1,432
      
15,002
  
 
These amounts above are available to reduce future federal and provincial income taxes in their respective jurisdictions. Net operating loss carry-forward balances attributable to the United States and Canada expire over the next
6
to
20
years.
 
Cumulative unremitted earnings of US and foreign subsidiaries approximated
$297,631
as at
December
31,
2016
(2015
-
$267,899).
Income tax is not provided on the unremitted earnings of US and foreign subsidiaries because it has been the practice and is the intention of the Company to reinvest these earnings indefinitely in these subsidiaries.
 
A reconciliation of the beginning and ending amounts of the liability for unrecognized tax benefits is as follows:
 
Balance, December 31, 2014
  
$
494
  
Reduction for lapses in applicable statutes of limitations
    
(202
)
Balance, December 31, 2015
    
292
  
Increases based on tax positions related to 2016
    
(144
)
Balance, December 31, 2016
  
$
148
  
 
  
Of the
$148
(2015
-
$292)
in gross unrecognized tax benefits,
$148,
(2015
-
$292)
would affect the Company’s effective tax rate if recognized. For the year ended
December
31,
2016,
a recovery of
$12
in interest and penalties related to provisions for income tax was recorded in income tax expense
(2015
- recovery of
$34).
As at
December
31,
2016,
the Company had accrued
$38
(2015
-
$50)
for potential income tax related interest and penalties.
 
The Company’s significant tax jurisdictions include the United States and Canada. The number of years with open tax audits varies depending on the tax jurisdictions. Generally, income tax returns filed with the Canada Revenue Agency and related provinces are open for
three
to
four
years and income tax returns filed with the U.S. Internal Revenue Service and related states are open for
three
to
five
years.
 
The Company does not currently expect any other material impact on earnings to result from the resolution of matters related to open taxation years, other than noted above. Actual settlements
may
differ from the amounts accrued. The Company has, as part of its analysis, made its current estimates based on facts and circumstances known to date and cannot predict changes in facts and circumstances that
may
affect its current estimates.