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Income Taxes (Tables)

9 Months Ended

Sep. 30, 2021

Income Tax Disclosure [Abstract]

Schedule of Effective Tax Rates

For the three months ended September 30, 2021, the Company recorded income tax expense of $4.4 million (2020 — income tax expense of $19.3 million). For the three months ended September 30, 2021, the Company’s effective tax rate of (226.6)% varies from the Canadian statutory tax rate of 26.2% that was in effect during the period as follows:

	Three Months Ended								Three Months Ended
	September 30, 2021								September 30, 2020
(In thousands of U.S. Dollars, except rates)	Amount				Rate				Amount				Rate
Income tax benefit at combined statutory rates	$	509			26.2%				$	7,279			26.2%
Adjustments resulting from:
Unrealized investment gains not taxable		—				—				420			1.5%
Increase of valuation allowance		(4,270	)		(219.8%)					(23,707	)		(85.3%)
Changes to tax reserves		(215	)		(11.1%)					(181	)		(0.7%)
Withholding taxes resulting from management's decision to no longer indefinitely reinvest the historical earnings of certain foreign subsidiaries		—				—				(186	)		(0.7%)
Reduction in tax benefits resulting from the vesting of share-based compensation		(4	)		(0.2%)					(38	)		(0.1%)
Other non-deductible/non-taxable items		(422	)		(21.7%)					(2,936	)		(10.5%)
Income tax expense	$	(4,402	)		(226.6%)				$	(19,349	)		(69.6%)

For the nine months ended September 30, 2021, the Company recorded income tax expense of $9.4 million (2020 — $24.6 million). For the nine months ended September 30, 2021, the Company’s effective tax rate of (69.5)% varies from the Canadian statutory tax rate of 26.2% that was in effect during the period as follows:

	Nine Months Ended						Nine Months Ended
	September 30, 2021						September 30, 2020
(In thousands of U.S. Dollars, except rates)	Amount				Rate		Amount				Rate
Income tax benefit at combined statutory rates	$	3,548			26.2%		$	29,201			26.2%
Adjustments resulting from:
Realized and unrealized investment gains (losses) not taxable		1,367			10.1%			(239	)		(0.2%)
Increase of valuation allowance		(14,248	)		(105.2%)			(23,706	)		(21.3%)
Changes to tax reserves		1,234			9.1%			(4,978	)		(4.5%)
Withholding taxes resulting from management's decision to no longer indefinitely reinvest the historical earnings of certain foreign subsidiaries		(547	)		(4.0%)			(18,661	)		(16.7%)
Increase in tax benefits resulting from the vesting of share-based compensation		709			5.2%			33				—
Other non-deductible/non-taxable items		(1,479	)		(10.9%)			(6,256	)		(5.6%)
Income tax expense	$	(9,416	)		(69.5%)		$	(24,606	)		(22.1%)

Income Tax Expense in Other Comprehensive (Loss) Income

For the three and nine months ended September 30, 2021 and 2020, the income tax expense related to the following items in Other Comprehensive (Loss) Income are:

	Three Months Ended									Nine Months Ended
		September 30,								September 30,
(In thousands of U.S. Dollars)		2021				2020				2021					2020
Unrealized change in cash flow hedging instruments		$	199			$	(160	)			$	42				$	235
Realized change in cash flow hedging instruments			82				(29	)				358					(211	)
Reclassification of unrealized change in ineffective cash flow hedging instruments			7				—					83					—
Defined benefit and postretirement benefit plans			(12	)			—					(37	)				40
		$	276			$	(189	)			$	446				$	64

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- Definition

Tax effect of the change in accumulated other comprehensive income (loss), that is, the tax effect on items included in other comprehensive income (loss) during the period.

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- Definition

Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 12
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32687-109319

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