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Income and other taxes | 12 Months Ended
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Dec. 31, 2019
Income Taxes [Abstract] |
Income and other taxes | Income and other taxes: a) Income tax expense:
For the years ended December 31 | 2019 |  | 2018 |
Current tax recovery (expense): |  |
Current period before undernoted items | $ | (38,953 | ) | $ | (117,496 | )
Benefit from unrecognised loss carry forwards | — |  | 23,860 |
Adjustments to prior years | 144 |  | 2,609 |
| (38,809 | ) | (91,027 | )
Deferred tax recovery (expense): |  |
Origination and reversal of temporary differences | 31,389 |  | (56,258 | )
Adjustments to prior years | (138 | ) | (2,331 | )
Changes in tax rates | 2,141 |  | 35 |
Other | 943 |  | (3,910 | )
| 34,335 |  | (62,464 | )
Total income tax expense | $ | (4,474 | ) | $ | (153,491 | )
b) Reconciliation of the effective tax rate: The Company operates in several tax jurisdictions and therefore its income is subject to various rates of taxation. Income tax expense differs from the amounts that would be obtained by applying the Canadian statutory income tax rate to net income before income taxes as follows:
For the years ended December 31 | 2019 |  | 2018 |
Income before income taxes | $ | 120,840 |  | $ | 811,475 |
Deduct earnings of associate | (52,218 | ) | (72,001 | )
| 68,622 |  | 739,474 |
Canadian statutory tax rate | 26.8 | % | 27.0 | %
Income tax expense calculated at Canadian statutory tax rate | (18,411 | ) | (199,658 | )
Decrease (increase) in income tax expense resulting from: |  |
Impact of income and losses taxed in foreign jurisdictions | 7,001 |  | 15,754 |
Utilization of unrecognised loss carryforwards and temporary differences | 6,945 |  | 31,325 |
Impact of tax rate changes | 2,141 |  | 35 |
Impact of foreign exchange | (484 | ) | (173 | )
Other business taxes | (2,798 | ) | (7,750 | )
Impact of non-taxable recovery items | 1,826 |  | 7,015 |
Adjustments to prior years | 6 |  | 278 |
Other | (700 | ) | (317 | )
Total income tax expense | $ | (4,474 | ) | $ | (153,491 | )
Effective from July 1, 2019 changes in Alberta provincial corporate income tax rates resulted in a lower statutory tax rate applicable to Methanex in Canada in 2019 when compared to 2018. c) Net deferred income tax liabilities: (i) The tax effect of temporary differences that give rise to deferred income tax liabilities and deferred income tax assets are as follows:
As at |  | Dec 31, 2019 |  |  | Jan 1, 2019
| Net |  | Deferred tax assets |  | Deferred tax liabilities |  |  | Net |  | Deferred tax assets |  | Deferred tax liabilities |
Property, plant and equipment (owned) | $ | (447,077 | ) | $ | (250,890 | ) | $ | (196,187 | ) |  | $ | (425,743 | ) | $ | (212,087 | ) | $ | (213,656 | )
Right-of-use assets | (45,501 | ) | (26,725 | ) | (18,776 | ) |  | (53,400 | ) | (39,600 | ) | (13,800 | )
Repatriation taxes | (93,363 | ) | — |  | (93,363 | ) |  | (94,446 | ) | — |  | (94,446 | )
Other | (10,424 | ) | (48 | ) | (10,376 | ) |  | (14,930 | ) | (6,700 | ) | (8,230 | )
| (596,365 | ) | (277,663 | ) | (318,702 | ) |  | (588,519 | ) | (258,387 | ) | (330,132 | )
Non-capital loss carryforwards | 286,004 |  | 286,004 |  | — |  |  | 233,237 |  | 233,237 |  | — |
Lease obligations | 56,802 |  | 33,979 |  | 22,823 |  |  | 63,415 |  | 45,239 |  | 18,176 |
Share-based compensation | 3,075 |  | — |  | 3,075 |  |  | 10,908 |  | 1,170 |  | 9,738 |
Other | 89,278 |  | 69,294 |  | 19,984 |  |  | 63,806 |  | 38,806 |  | 25,000 |
| 435,159 |  | 389,277 |  | 45,882 |  |  | 371,366 |  | 318,452 |  | 52,914 |
Net deferred income tax assets (liabilities) | $ | (161,206 | ) | $ | 111,614 |  | $ | (272,820 | ) |  | $ | (217,153 | ) | $ | 60,065 |  | $ | (277,218 | )
The comparative as at January 1, 2019 has been presented to reflect the adjustments in adoption of IFRS 16. Deferred tax assets/liabilities in respect of finance leases held as at December 31, 2018 that were previously reflected under Other have been presented under the right-of-use assets and lease obligations as at January 1, 2019 and as at December 31, 2019. The table below shows the impact of the adjustment on adoption of IFRS 16 and new presentation to the December 31, 2018 finance lease balances:
As at |  | Jan 1, 2019 |  |  | Dec 31, 2018
| Net |  | Deferred tax assets |  | Deferred tax liabilities |  |  | Net |  | Deferred tax assets |  | Deferred tax liabilities |
Property, plant and equipment (owned) | $ | (425,743 | ) | $ | (212,087 | ) | $ | (213,656 | ) |  | $ | (425,743 | ) | $ | (212,087 | ) | $ | (213,656 | )
Right-of-use assets | (53,400 | ) | (39,600 | ) | (13,800 | ) |  | — |  | — |  | — |
Repatriation taxes | (94,446 | ) | — |  | (94,446 | ) |  | (94,446 | ) | — |  | (94,446 | )
Other | (14,930 | ) | (6,700 | ) | (8,230 | ) |  | (14,930 | ) | (6,700 | ) | (8,230 | )
| (588,519 | ) | (258,387 | ) | (330,132 | ) |  | (535,119 | ) | (218,787 | ) | (316,332 | )
Non-capital loss carryforwards | 233,237 |  | 233,237 |  | — |  |  | 233,237 |  | 233,237 |  | — |
Lease obligations | 63,415 |  | 45,239 |  | 18,176 |  |  | — |  | — |  | — |
Share-based compensation | 10,908 |  | 1,170 |  | 9,738 |  |  | 10,908 |  | 1,170 |  | 9,738 |
Other | 63,806 |  | 38,806 |  | 25,000 |  |  | 69,292 |  | 43,912 |  | 25,380 |
| 371,366 |  | 318,452 |  | 52,914 |  |  | 313,437 |  | 278,319 |  | 35,118 |
Net deferred income tax assets (liabilities) | $ | (217,153 | ) | $ | 60,065 |  | $ | (277,218 | ) |  | $ | (221,682 | ) | $ | 59,532 |  | $ | (281,214 | )
As at December 31, 2019, deferred income tax assets have been recognized in respect of non-capital loss carryforwards generated in the United States. These loss carryforwards expire as follows:
| Dec 31 2019
| Gross amount |  | Tax effect |
Expire |  |
Losses generated in 2015 (expires 2035) | $ | 333,240 |  | $ | 76,645 |
Losses generated in 2016 (expires 2036) | 432,581 |  | 99,494 |
Losses generated in 2017 (expires 2037) | 234,941 |  | 54,036 |
| 1,000,762 |  | 230,175 |
No expiry |  |
Losses generated in 2019 | 242,734 |  | 55,829 |
Total non-capital loss carryforwards | $ | 1,243,496 |  | $ | 286,004 |
Losses generated in the United States on or after January 1, 2018 may be carried forward indefinitely against future taxable income. Tax losses generated before December 31, 2017 may be carried forward for a 20 year period. As at December 31, 2019 the Company had $323 million (2018 - $ 354 million) of deductible temporary differences in the United States that have not been recognized. (ii) Analysis of the change in deferred income tax assets and liabilities:
|  | 2019 |  |  |  | 2018 |
| Net |  | Deferred tax assets |  | Deferred tax liabilities |  |  | Net |  | Deferred tax assets |  | Deferred tax liabilities |
Balance, January 1 | $ | (221,682 | ) | $ | 59,532 |  | $ | (281,214 | ) |  | $ | (164,091 | ) | $ | 102,341 |  | $ | (266,432 | )
Adjustment on adoption of IFRS 16 | 4,529 |  | 533 |  | 3,996 |  |  | — |  | — |  | — |
Balance, January 1 (restated) | (217,153 | ) | 60,065 |  | (277,218 | ) |  | (164,091 | ) | 102,341 |  | (266,432 | )
Deferred income tax recovery (expense) included in net income | 34,335 |  | 28,875 |  | 5,460 |  |  | (62,464 | ) | (44,277 | ) | (18,187 | )
Deferred income tax recovery included in other comprehensive income | 22,049 |  | 21,871 |  | 178 |  |  | 3,980 |  | 1,253 |  | 2,727 |
Other | (437 | ) | 803 |  | (1,240 | ) |  | 893 |  | 215 |  | 678 |
Balance, December 31 | $ | (161,206 | ) | $ | 111,614 |  | $ | (272,820 | ) |  | $ | (221,682 | ) | $ | 59,532 |  | $ | (281,214 | )

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