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Income Taxes | 12 Months Ended
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Dec. 31, 2019
Net Deferred Tax Assets And Liabilities [Abstract] |
Income Taxes | NOTE 15. INCOME TAXES The provision for income taxes differs from that which would be expected by applying statutory Canadian income tax rates. A reconciliation of the difference for the years ended December 31, is as follows:
|  | 2019 |  |  | 2018 |
Loss before income taxes | $ |  | (8,339 | ) | $ |  | (323,596 | )
Federal and provincial statutory rates |  |  | 27 | % |  |  | 27 | %
Tax at statutory rates | $ |  | (2,252 | ) | $ |  | (87,371 | )
Adjusted for the effect of: |  |  |  |  |  |  |  |
Non-deductible expenses |  |  | 1,597 |  |  |  | 49,455 |
Non-taxable capital gains |  |  | (1,408 | ) |  |  | (845 | )
Impact of foreign tax rates |  |  | (13,549 | ) |  |  | 4,861 |
Withholding taxes |  |  | 1,262 |  |  |  | 1,061 |
Taxes related to prior years |  |  | (1,975 | ) |  |  | 3,803 |
Other |  |  | 1,368 |  |  |  | (290 | )
Income tax recovery | $ |  | (14,957 | ) | $ |  | (29,326 | )
In 2019, the Province of Alberta announced various reductions to corporate income tax rates, that when fully implemented over the next three years will decrease the provincial corporate income tax rate from 12% to 8% by 2022. The impact of this rate reduction is nominal and has been reflected in the current year tax recovery. On December 22, 2017, the United States government enacted new tax legislation which, in addition to changing certain U.S. federal income tax laws, reduced the U.S. federal income tax rate from 35% to 21% effective January 1, 2018. The impact of the lower U.S. federal income tax rate on Precision’s U.S. subsidiaries was reflected as at December 31, 2017. The net deferred tax liability is comprised of the tax effect of the following temporary differences:
|  | 2019 |  |  | 2018 |
Deferred tax liability: |  |  |  |  |  |  |  |
Property, plant and equipment and intangibles | $ |  | 426,934 |  | $ |  | 467,109 |
Debt issue costs |  |  | 3,280 |  |  |  | 3,534 |
Partnership deferrals |  |  | 850 |  |  |  | 1,730 |
Other |  |  | 7,926 |  |  |  | 5,722 |
|  |  | 438,990 |  |  |  | 478,095 |
Offsetting of assets and liabilities |  |  | (413,601 | ) |  |  | (405,316 | )
|  |  | 25,389 |  |  |  | 72,779 |
Deferred tax assets: |  |  |  |  |  |  |  |
Losses (expire from time to time up to 2038) |  |  | 402,025 |  |  |  | 423,595 |
Long-term incentive plan |  |  | 6,131 |  |  |  | 6,849 |
Other |  |  | 10,169 |  |  |  | 11,752 |
|  |  | 418,325 |  |  |  | 442,196 |
Offsetting of assets and liabilities |  |  | (413,601 | ) |  |  | (405,316 | )
|  |  | 4,724 |  |  |  | 36,880 |
Net deferred tax liability | $ |  | 20,665 |  | $ |  | 35,899 |
Included in the deferred tax assets at December 31, 2019 is $5 million of tax-effected temporary differences related to the Corporation’s international operations and at December 31, 2018, $37 million related to the Corporation’s U.S. and international operations. The Corporation has certain loss carryforwards in U.S. and international locations and capital loss carry forwards in Canada for which it is unlikely that sufficient future taxable income will be available. Accordingly, the Corporation has not recognized a deferred tax asset on these losses totaling $31 million and $33 million, respectively. The movement in temporary differences is as follows:
|  | Property, Plant and Equipment and Intangibles |  |  | Partnership Deferrals |  |  | Other Deferred Tax Liabilities |  |  | Losses |  |  | Debt Issue Costs |  |  | Long-Term Incentive Plan |  |  | Other Deferred Tax Assets |  |  | Net Deferred Tax Liability |
Balance, December 31, 2017 | $ |  | 454,613 |  | $ |  | (335 | ) | $ |  | 6,709 |  | $ |  | (368,133 | ) | $ |  | 3,352 |  | $ |  | (7,935 | ) | $ |  | (11,182 | ) | $ |  | 77,089 |
Recognized in net loss |  |  | (9,667 | ) |  |  | 2,065 |  |  |  | (1,005 | ) |  |  | (30,660 | ) |  |  | 182 |  |  |  | 1,325 |  |  |  | (139 | ) |  |  | (37,899 | )
Effect of foreign currency exchange differences |  |  | 22,163 |  |  |  | — |  |  |  | 18 |  |  |  | (24,802 | ) |  |  | — |  |  |  | (239 | ) |  |  | (431 | ) |  |  | (3,291 | )
Balance, December 31, 2018 | $ |  | 467,109 |  | $ |  | 1,730 |  | $ |  | 5,722 |  | $ |  | (423,595 | ) | $ |  | 3,534 |  | $ |  | (6,849 | ) | $ |  | (11,752 | ) | $ |  | 35,899 |
Recognized in net earnings |  |  | (26,825 | ) |  |  | (880 | ) |  |  | 2,216 |  |  |  | 7,874 |  |  |  | (254 | ) |  |  | 572 |  |  |  | 1,260 |  |  |  | (16,037 | )
Effect of foreign currency exchange differences |  |  | (13,350 | ) |  |  | — |  |  |  | (12 | ) |  |  | 13,696 |  |  |  | — |  |  |  | 146 |  |  |  | 323 |  |  |  | 803 |
Balance, December 31, 2019 | $ |  | 426,934 |  | $ |  | 850 |  | $ |  | 7,926 |  | $ |  | (402,025 | ) | $ |  | 3,280 |  | $ |  | (6,131 | ) | $ |  | (10,169 | ) | $ |  | 20,665 |
At December 31, 2019, Precision had unrecognized tax benefits of $nil. At December 31, 2018, Precision had $2 million of unrecognized tax benefits that, if recognized, would have a favourable impact on Precision’s effective income tax rate in future periods. Precision classifies interest accrued on unrecognized tax benefits and income tax penalties as income tax expense. Included in the unrecognized tax benefit, as at December 31, 2018 was interest and penalties of $1 million.

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