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Note 16 - IncomeTax
 12 Months Ended
Dec. 31, 2011
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. These differences result from the following items:

 
 
2011
   
2010
   
2009
 
 
 
 
   
 
   
 
 
Income tax expense using combined statutory rate of 28% (2010 - 31%, 2009 - 33%)
  $ 21,158     $ 23,909     $ 10,489  
Permanent differences
    4,554       2,933       1,942  
Tax effect of flow through entities
    (3,462 )     (2,768 )     (796 )
Goodwill or other investment impairment charge
    874       -       9,643  
Impact of changes in foreign exchange rates
    (679 )     (1,426 )     4,718  
Adjustments to tax liabilities for prior periods
    940       1,499       (2,600 )
Effects of changes in enacted tax rates
    52       2,049       (854 )
Changes in liability for unrecognized tax benefits
    (342 )     (5,881 )     1,418  
Stock-based compensation
    (386 )     (39 )     (37 )
Foreign state and provincial tax rate differential
    (1,763 )     (3,829 )     (2,795 )
Withholding tax
    486       396       517  
Other taxes
    901       678       453  
Loss (earnings) from equity method investments
    605       1,348       (321 )
Non-taxable income
    -       (1,398 )     -  
Change in valuation allowances
    (49,745 )     11,757       17,289  
Provision for (recovery of) income taxes as reported
  $ (26,807 )   $ 29,228     $ 39,066  

Earnings before income tax by jurisdiction comprise the following:

 
 
2011
   
2010
   
2009
 
 
 
 
   
 
   
 
 
Canada
  $ 33,331     $ 22,446     $ 30,112  
United States
    21,172       32,508       5,680  
Australia
    21,791       21,698       11,443  
Foreign
    (1,358 )     476       (15,448 )
Total
  $ 74,936     $ 77,128     $ 31,787  

The provision for (recovery of) income tax comprises the following:

 
 
2011
   
2010
   
2009
 
 
 
 
   
 
   
 
 
Current
 
 
   
 
   
 
 
Canada
  $ 4,630     $ 4,758     $ 2,244  
United States
    21,625       24,667       32,247  
Australia
    7,206       6,795       3,365  
Foreign
    3,708       448       1,795  
 
    37,169       36,668       39,651  
 
                       
Deferred
                       
Canada
    (275 )     (5,441 )     878  
United States
    (63,049 )     29       (576 )
Australia
    (729 )     (1,418 )     269  
Foreign
    77       (610 )     (1,156 )
 
    (63,976 )     (7,440 )     (585 )
Total
  $ (26,807 )   $ 29,228     $ 39,066  

The significant components of deferred income tax are as follows:

 
 
2011
   
2010
 
 
 
 
   
 
 
Deferred income tax assets
 
 
   
 
 
Loss carry-forwards
  $ 76,422     $ 68,074  
Expenses not currently deductible
    15,179       12,966  
Stock-based compensation
    4,084       3,940  
Basis differences of partnerships and other entities
    11,316       1,093  
Allowance for doubtful accounts
    4,752       4,751  
Inventory and other reserves
    853       615  
 
    112,606       91,439  
Less: Valuation allowance
    (8,139 )     (55,624 )
 
    104,467       35,815  
 
               
Deferred income tax liabilities
               
Depreciation and amortization
    37,880       33,293  
Unrealized foreign exchange gains
    168       518  
Prepaid and other expenses deducted for tax purposes
    995       189  
Financing fees
    112       269  
 
    39,155       34,269  
Net deferred income tax asset
  $ 65,312     $ 1,546  

Since 2008, the Company has recognized valuation allowances with respect to deferred income tax assets in its Commercial Real Estate operations, primarily in the United States, due to a history of operating losses.  During the fourth quarter of 2011, the Company completed a reorganization of certain operations in the United States to improve administrative efficiency and achieve other benefits. This reorganization was previously not considered prudent or feasible as the acquisitions and/or consents of significant non-controlling interests were required to complete the reorganization, which acquisitions and consents were not completed until the fourth quarter of 2011.  The reorganization provided objective evidence of projected future taxable income and pro forma historical taxable income that outweighs the negative evidence of historical operating losses. In addition, the projection of future taxable income results in the utilization of net operating losses well before the 20-year loss carry-forward limitation. As a result, a valuation allowance in the amount of $48,351 related to the United States Commercial Real Estate operations was reversed as of December 31, 2011.

As at December 31, 2011, the Company had gross operating loss carry-forward balances in the United States, primarily in the Commercial Real Estate segment, of approximately $143,875 (2010 - $112,115) prior to a valuation allowance of $4,092 (2010 - $110,342).  Also in the United States, the Company also had gross capital loss carry-forward balances which amounted to $692 (2010 - $10,446) as at December 31, 2011 prior to a valuation allowance of $692 (2010 - $10,446).

As at December 31, 2011, the Company had gross Canadian operating loss carry-forward balances of approximately $52,353 (2010 - $55,246) prior to a valuation allowance of $2,857 (2010 - $1,145).  These amounts are available to reduce future federal and provincial income taxes.

Net operating loss carry-forward balances attributable to the United States and Canada expire over the next 14 to 20 years.

The Company had gross foreign operating loss carry-forward balances as at December 31, 2011 of approximately $29,442 (2010 - $27,901), prior to a valuation allowance of $26,784 (2010 - $26,641).

Foreign gross capital loss carry-forward balances in Australia amounted to $9,389 (2010 - $9,634) as at December 31, 2011 prior to a valuation allowance of $9,389 (2010 - $9,634).

Cumulative unremitted earnings of US and foreign subsidiaries approximated $158,308 as at December 31, 2011 (2010 - $146,947).

A reconciliation of the beginning and ending amounts of the liability for unrecognized tax benefits is as follows:

Balance, December 31, 2009
 
$
 14,390 
 
Increases based on tax positions related to the current period
 
 
 944 
 
Reduction for lapses in applicable statutes of limitations
 
 
 (7,614)
 
 
 
 
 
 
Balance, December 31, 2010
 
 
 7,720 
 
Increases based on tax positions related to the current period
 
 
 1,903 
 
Decreases for tax positions of prior periods
 
 
 (659)
 
Reduction for lapses in applicable statutes of limitations
 
 
 (1,362)
 
Balance, December 31, 2011
 
$
 7,602 
 

Of the $7,602 (2010 - $7,720) in gross unrecognized tax benefits, $7,602, (2010 - $7,720) would affect the Company’s effective tax rate if recognized.  For the year ended December 31, 2011, a recovery of $238 in interest and penalties related to provisions for income tax was recorded in income tax expense (2010 - recovery of $994; 2009 - expense of $125).  As at December 31, 2011, the Company had accrued $160 (2010 - $398) for potential income tax related interest and penalties.

Within the next twelve months, the Company believes it is reasonably possible that $438 of unrecognized tax benefits associated with uncertain tax positions may be reduced due to lapses in statutes of limitations.

The Company’s significant tax jurisdictions include the United States, Canada and Australia.  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.  Tax returns in Australia are generally open for four 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.