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INCOME TAXES | 12 Months Ended
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Dec. 31, 2017
Income Taxes [Abstract] |
INCOME TAXES | INCOME TAXES: The income tax provision differs from the amount computed by applying the combined Canadian federal and provincial tax rates to earnings before income taxes. The reasons for the difference and the related tax effects are as follows:
|  | 2017 |  | 2016 |
Earnings before income taxes | $ | 376,816 |  |  | $ | 351,838 |
Applicable tax rate | 26.8 | % |  | 26.8 | %
Income taxes at applicable statutory rate | 101,100 |  |  | 94,398 |
(Decrease) increase in income taxes resulting from: |  |  |
| Effect of different tax rates on earnings of foreign subsidiaries | (89,722 | ) |  | (83,208 | )
| Income tax recovery and other adjustments related to prior taxation years | (1,676 | ) |  | (4,822 | )
| Effect of reduction in tax rate | (1,633 | ) |  | — |
| Effect of revaluation of deferred taxes on intangible assets | (62,228 | ) |  | — |
| Non-recognition of tax benefits related to tax losses and temporary differences | 62,488 |  |  | 1,545 |
| Effect of non-deductible expenses and other | 6,153 |  |  | (2,713 | )
Total income tax expense | $ | 14,482 |  |  | $ | 5,200 |
Average effective tax rate | 3.8 | % |  | 1.5 | %
The Company’s applicable statutory tax rate is the Canadian combined rate applicable in the jurisdictions in which the Company operates. The details of income tax expense are as follows:
|  | 2017 |  |  | 2016 |
Current income taxes, includes a recovery of $1,368 |  |  |
(2016 - recovery of $2,725) relating to prior taxation years | $ | 9,587 |  |  | $ | 8,356 |
Deferred income taxes: |  |  |
| Reduction in tax rate | (1,633 | ) |  | — |
| Revaluation of deferred taxes on intangible assets | (62,228 | ) |  | — |
| Origination and reversal of temporary differences | 6,576 |  |  | (1,059 | )
| Non-recognition of tax benefits related to tax losses and temporary differences | 62,488 |  |  | — |
| Recognition of tax benefits relating to prior taxation years | (308 | ) |  | (2,097 | )
| 4,895 |  |  | (3,156 | )
Total income tax expense | $ | 14,482 |  |  | $ | 5,200 |
On December 22, 2017, the President of the United States signed into law the Tax Cuts and Jobs Act (U.S. Tax Reform). The U.S. Tax Reform reduces the statutory federal corporate income tax rate from 35% to 21% effective January 1, 2018, and makes other changes to U.S. corporate tax laws. During the fourth quarter of fiscal 2017, the Company revalued the net deferred tax liability position in its U.S. subsidiaries, to reflect the change in the statutory federal corporate income tax rate that will take effect in 2018, resulting in an income tax recovery of $1.6 million. In addition, the Company incurred a net deferred tax expense of $3.3 million in fiscal 2017 relating to an internal organizational realignment of its Branded Apparel business unit, consisting of a $56.5 million increase in the non-recognition of deferred income tax assets and a $9.0 million reduction in deferred income tax assets relating to the reversal of temporary differences, less a $62.2 million revaluation of deferred income tax liabilities. 18. INCOME TAXES (continued): Significant components of the Company’s deferred income tax assets and liabilities relate to the following temporary differences and unused tax losses:
|  | December 31, 2017 |  |  | January 1, 2017 |
Deferred tax assets: |  |  |
| Non-capital losses | $ | 75,433 |  |  | $ | 76,345 |
| Non-deductible reserves and accruals | 5,712 |  |  | 49,856 |
| Property, plant and equipment | 9,629 |  |  | 7,239 |
| Other items | 6,609 |  |  | 4,946 |
|  | 97,383 |  |  | 138,386 |
| Unrecognized deferred tax assets | (67,152 | ) |  | (27,529 | )
Deferred tax assets | $ | 30,231 |  |  | $ | 110,857 |
Deferred tax liabilities: |  |  |
| Property, plant and equipment | $ | (24,239 | ) |  | $ | (32,703 | )
| Intangible assets | (9,705 | ) |  | (76,654 | )
Deferred tax liabilities | $ | (33,944 | ) |  | $ | (109,357 | )
Deferred income taxes | $ | (3,713 | ) |  | $ | 1,500 |
The details of changes to deferred income tax assets and liabilities were as follows:
|  | 2017 |  |  | 2016 |
Balance, beginning of fiscal year, net | $ | 1,500 |  |  | $ | 2,793 |
Recognized in the statements of earnings: |  |  |
| Non-capital losses | 31,202 |  |  | 9,847 |
| Non-deductible reserves and accruals | (41,052 | ) |  | 3,004 |
| Property, plant and equipment | (3,062 | ) |  | (11,438 | )
| Intangible assets | 66,888 |  |  | 498 |
| Other | 1,984 |  |  | 2,790 |
| Reduction in tax rate | 1,633 |  |  | — |
| Unrecognized deferred tax assets | (62,488 | ) |  | (1,545 | )
|  | (4,895 | ) |  | 3,156 |
Business acquisitions | — |  |  | (4,542 | )
Other | (318 | ) |  | 93 |
Balance, end of fiscal year, net | $ | (3,713 | ) |  | $ | 1,500 |
As at December 31, 2017, the Company has tax credits, capital and non-capital loss carryforwards, and other deductible temporary differences available to reduce future taxable income for tax purposes representing a tax benefit of approximately $67.2 million, for which no deferred tax asset has been recognized (January 1, 2017 - $27.5 million), because the criteria for recognition of the tax asset was not met. The tax credits and capital and non-capital loss carryforwards expire between 2018 and 2037. The recognized deferred tax asset is supported by projections of future profitability of the Company. The Company has not recognized a deferred income tax liability for the undistributed profits of subsidiaries operating in foreign jurisdictions, as the Company currently has no intention to repatriate these profits. If expectations or intentions change in the future, the Company may be subject to an additional tax liability upon distribution of these earnings in the form of dividends or otherwise. As at December 31, 2017, a deferred income tax liability of approximately $68 million would result from the recognition of the taxable temporary differences of approximately $305 million.

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