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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2024
Income Taxes [Abstract] |
Disclosure of rate reconciliations |
Year ended Dec. 31 | 2024 | 2023 | 2022
Earnings before income taxes | 319 |  | 880 |  | 353 |
Net earnings attributable to non-controlling interests not subject to tax | (10) |  | (80) |  | (94) |
Adjusted earnings before income taxes | 309 |  | 800 |  | 259 |
Statutory Canadian federal and provincial income tax rate (%) | 23.3 | % | 23.4 | % | 23.4 | %
Expected income tax expense | 72 |  | 187 |  | 61 |
(Decrease) increase in income taxes resulting from: |  |  |
Differences in effective foreign tax rates | (6) |  | 9 |  | (1) |
Non-deductible expense(1) | 46 |  | 58 |  | 130 |
Non-taxable income | (10) |  | — |  | — |
Taxable capital loss (gain) | 1 |  | (2) |  | 18 |
Deferred income tax recovery related to temporary difference on investment in subsidiaries | (5) |  | (3) |  | (2) |
Reversal of unrecognized deferred income tax assets | (13) |  | (178) |  | (24) |
Statutory and other rate differences | (1) |  | 1 |  | (3) |
Adjustments in respect of deferred income tax of previous years | (11) |  | 1 |  | 6 |
Other | 7 |  | 11 |  | 7 |
Income tax expense | 80 |  | 84 |  | 192 |
Effective tax rate (%) | 26 | % | 11 | % | 74 | %
(1)This amount is related to current tax adjustments in the U.S. to mitigate cash tax relating to the Base Erosion and Anti-Abuse Tax, Canadian non-deductible penalties, and a tax adjustment relating to dividends on preferred shares, treated as interest for accounting purposes.
Disclosure of components of income tax expense | The components of income tax expense are as follows:
Year ended Dec. 31 | 2024 |  | 2023 | 2022 |
Current income tax expense | 143 |  |  | 50 |  | 65 |  |
Deferred income tax (recovery) expense related to the origination and reversal of temporary differences | (45) |  |  | 215 |  | 153 |  |
Deferred income tax recovery related to temporary difference on investment in subsidiaries | (5) |  |  | (3) |  | (2) |  |
Reversal of unrecognized deferred income tax assets(1) | (13) |  |  | (178) |  | (24) |  |
Income tax expense | 80 |  |  | 84 |  | 192 |  |
Current income tax expense | 143 |  |  | 50 |  | 65 |  |
Deferred income tax (recovery) expense | (63) |  |  | 34 |  | 127 |  |
Income tax expense | 80 |  |  | 84 |  | 192 |  |
(1)During the year ended Dec. 31, 2024, the Company recognized deferred tax assets of $13 million (2023 — $178 million, 2022 — $24 million). The deferred income tax assets mainly relate to the tax benefits associated with tax losses related to the Company's directly owned U.S. operations and other deductible differences. The Company has not recognized $152 million (2023 — $157 million) of deferred tax assets on the basis that it is not probable that sufficient future taxable income would be available to utilize these tax assets.
Disclosure of aggregate current and deferred income tax related to items charged or credited to equity | The aggregate current and deferred income tax related to items charged or credited to equity are as follows:
Year ended Dec. 31 | 2024 |  | 2023 | 2022
Income tax expense (recovery) related to: |  |  |  |
Net impact related to cash flow hedges | 53 |  |  | 27 |  | (112) |
Net impact related to hedges of foreign operations | (4) |  |  | 1 |  | (3) |
Net impact related to net actuarial gains (losses) | 3 |  |  | (1) |  | 12 |
Transaction costs for the acquisition of TransAlta Renewables | — |  |  | (2) |  | — |
Income tax expense (recovery) reported in equity | 52 |  |  | 25 |  | (103) |
Disclosure of significant components of deferred income tax assets (liabilities) | Significant components of the Company’s deferred income tax assets (liabilities) are as follows:
As at Dec. 31 | 2024 |  | 2023(2)
Non-capital losses(1) | 149 |  |  | 88 |
Future decommissioning and restoration costs | 184 |  |  | 140 |
Property, plant and equipment | (646) |  |  | (528) |
Investment in subsidiaries(2) | (60) |  |  | (63) |
Risk management assets and liabilities, net | 40 |  |  | 99 |
Employee future benefits and compensation plans | 52 |  |  | 50 |
Foreign exchange differences | 16 |  |  | 12 |
Other taxable temporary differences | (1) |  |  | (6) |
Net deferred income tax liabilities, before unrecognized deferred income tax assets | (266) |  |  | (208) |
Unrecognized deferred income tax assets | (152) |  |  | (157) |
Net deferred income tax liabilities | (418) |  |  | (365) |
(1)Non-capital losses expire between 2031 and 2044. Net operating losses from U.S. operations have no expiration. (2)Classification for the 2023 comparative figures has been conformed to the current period's presentation. The net deferred income tax liability is presented in the Consolidated Statements of Financial Position as follows:
As at Dec. 31 | 2024 |  | 2023
Deferred income tax assets(1) | 52 |  |  | 21 |
Deferred income tax liabilities | (470) |  |  | (386) |
Net deferred income tax liabilities | (418) |  |  | (365) |
(1)The deferred income tax assets presented on the Consolidated Statements of Financial Position are recoverable based on estimated future earnings and tax planning strategies. The assumptions used in the estimate of future earnings are based on the Company’s long-range forecasts.

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