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Note 16 - Income Tax
 12 Months Ended
Dec. 31, 2020
Notes to Financial Statements  
Income Tax Disclosure [Text Block]
16.
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:
 
   
2020
   2019
   
 
    
Income tax expense using combined statutory rate of 26.5% (2019 - 26.5%, 2018 - 26.5%)  
$
38,545
 
   $
(53,128
 )
Permanent differences  
 
820
 
    
1,566
  
Tax effect of flow through entities  
 
-
 
    
(307
 )
Adjustments to tax liabilities for prior periods  
 
882
 
    
(328
 )
Non-deductible stock-based compensation  
 
3,081
 
    
2,153
  
Excess tax benefits related to stock-based compensation  
 
-
 
    
(3,672
 )
Foreign, state and provincial tax rate differential  
 
(7,463
)
    
(2,402
 )
Settlement of long-term incentive arrangement  
 
-
 
    
83,310
  
Other taxes  
 
-
 
    
(45
 )
Provision for income taxes as reported  
$
35,865
 
   $
27,147
  
 
Earnings before income tax by jurisdiction comprise the following:
 
    2020   2019
         
Canada   $
19,166
     $
(323,100
 )
United States    
126,289
      
122,616
  
Total   $
145,455
     $
(200,484
 )
 
Income tax expense (recovery) comprises the following:
 
    2020   2019
         
Current                
Canada   $
3,300
     $
369
  
United States    
49,759
      
33,978
  
     
53,059
      
34,347
  
                 
Deferred                
Canada    
1,350
      
(1,620
 )
United States    
(18,544
 )    
(5,580
 )
     
(17,194
 )    
(7,200
 )
                 
Total   $
35,865
     $
27,147
  
 
The significant components of deferred income tax are as follows:
 
    2020   2019
         
Deferred income tax assets                
Loss carry-forwards   $
1,441
     $
2,788
  
Expenses not currently deductible    
39,415
      
23,283
  
Stock-based compensation    
-
      
749
  
Allowance for doubtful accounts    
5,535
      
3,860
  
Inventory and other reserves    
865
      
3,024
  
     
47,256
      
33,704
  
                 
Deferred income tax liabilities                
Depreciation and amortization    
83,676
      
86,072
  
Basis differences of partnerships and other entities    
769
      
793
  
Prepaid and other expenses deducted for tax purposes    
1,505
      
1,276
  
     
85,950
      
88,141
  
                 
Net deferred income tax asset (liability) before valuation allowance    
(38,694
 )    
(54,437
 )
Valuation allowance    
603
      
965
  
                 
Net deferred income tax asset (liability)   $
(39,297
 )   $
(55,402
 )
 
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
    2020   2019   2020   2019   2020   2019
                         
Canada   $
1,364
     $
4,430
     $
-
     $
-
     $
1,364
     $
4,430
  
United States    
13,733
      
18,615
      
11,417
      
15,840
      
2,316
      
2,775
  
 
These amounts above are available to reduce future federal, state, 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
$628,142
as at
December 31, 2020 (
2019
-
$528,519
). 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.
 
The gross unrecognized tax benefits are
$148
(
2019
-
$148
). Of this balance,
$148
(
2019
-
$148
) would affect the Company's effective tax rate if recognized. For the year ended
December 31, 2020,
there was
no
adjustment to interest and penalties related to provisions for income tax (
2019
-
nil
). As at
December 31, 2020,
the Company had accrued
$38
(
2019
-
$38
) 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.