XML 29 R17.htm IDEA: XBRL DOCUMENT v3.23.1
Income Taxes
 3 Months Ended
Mar. 31, 2023
Income Tax Disclosure [Abstract]  
Income Taxes

10. Income Taxes

 

(a)
Income Tax Expense

For the three months ended March 31, 2023, the Company recorded income tax expense of $4.9 million (2022 — $2.6 million). For the three months ended March 31, 2023, the Company’s effective tax rate differs from the combined Canadian federal and provincial statutory income tax rate due to the following factors:

 

Three Months Ended

 

Three Months Ended

 

March 31, 2023

 

March 31, 2022

(In thousands of U.S. Dollars, except rates)

Amount

 

 

Rate

 

Amount

 

 

Rate

Income tax (expense) benefit at combined statutory rates

$

(2,652

)

 

26.5%

 

$

2,475

 

 

26.5%

Adjustments resulting from:

 

 

 

 

 

 

 

 

 

Increase in valuation allowance

 

(1,610

)

 

16.1%

 

 

(5,009

)

 

(53.6%)

Shortfall tax benefits related to share-based compensation

 

(83

)

 

0.8%

 

 

(129

)

 

(1.4%)

Changes to tax reserves

 

(258

)

 

2.6%

 

 

(160

)

 

(1.7%)

Other

 

(282

)

 

2.8%

 

 

213

 

 

2.3%

Income tax expense

$

(4,885

)

 

48.8%

 

$

(2,610

)

 

(27.9%)

As of March 31, 2023, the Company’s Condensed Consolidated Balance Sheets include deferred income tax assets of $11.2 million, net of a valuation allowance of $64.5 million (December 31, 2022 — $9.9 million, net of a valuation allowance of $62.9 million). For the three months ended March 31, 2023, the Company recorded an additional $1.6 million (2022 — $5.0 million) valuation allowance where management cannot determine that the tax benefits will be realizable based on available evidence. The increase in the valuation allowance recorded in the three months ended March 31, 2023 and 2022 is reflected within Income Tax Expense in the Company's Condensed Consolidated Statements of Operations. The valuation allowance is expected to reverse at the point in time when management determines it is more likely than not that the Company will incur sufficient tax liabilities to allow it to utilize the deferred tax assets against which the valuation allowance is recorded.

As of March 31, 2023, the Company's Condensed Consolidated Balance Sheets also include deferred tax liabilities of $16.0 million (December 31, 2022 — $14.9 million).

(b)
Income Tax Effect on Other Comprehensive Income

 

For the three months ended March 31, 2023 and 2022, the Income Tax Expense related to the components of Other Comprehensive Income (“OCI”) is as follows:

 

 

Three Months Ended

 

 

 

March 31,

 

(In thousands of U.S. Dollars)

 

2023

 

 

2022

 

Unrealized change in cash flow hedging instruments

 

$

(35

)

 

$

(82

)

Realized change in cash flow hedging instruments

 

 

(89

)

 

 

(8

)

Defined benefit and postretirement benefit plans

 

 

46

 

 

 

(12

)

 

$

(78

)

 

$

(102

)