Income Taxes

12 Months Ended

Dec. 31, 2020

Net Deferred Tax Assets And Liabilities [Abstract]

NOTE 14. 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:

		2020				2019
Loss before income taxes	$		(109,184	)	$		(8,339	)
Federal and provincial statutory rates			25	%			27	%
Tax at statutory rates	$		(27,296	)	$		(2,252	)
Adjusted for the effect of:
Non-deductible expenses			628				1,597
Non-taxable capital gains			(6,184	)			(1,408	)
Impact of foreign tax rates			(238	)			(13,549	)
Withholding taxes			813				1,262
Taxes related to prior years			(1,531	)			(1,975	)
Tax assets not recognized			44,112				—
Other			650				1,368
Income tax expense (recovery)	$		10,954		$		(14,957	)

In 2020, the Province of Alberta accelerated the reductions to corporate income tax rates which were announced in 2019. The tax rate was decreased to 8% effective July 1, 2020. The impact of this rate reduction is nominal and has been reflected in the current year tax expense.

The net deferred tax liability is comprised of the tax effect of the following temporary differences:

		2020				2019
Deferred tax liability:
Property, plant and equipment and intangibles	$		393,631		$		426,934
Debt issue costs			2,665				3,280
Partnership deferrals			2,532				850
Other			6,322				7,926
			405,150				438,990
Offsetting of assets and liabilities			(383,914	)			(413,601	)
	$		21,236		$		25,389

Deferred tax assets:
Losses (expire from time to time up to 2040)	$		370,439		$		402,025
Long-term incentive plan			4,956				6,131
Other			9,617				10,169
			385,012				418,325
Offsetting of assets and liabilities			(383,914	)			(413,601	)
	$		1,098		$		4,724

Net deferred tax liability	$		20,138		$		20,665

Included in the deferred tax assets at December 31, 2020 was $1 million (2019 – $5 million) of tax-effected temporary differences related to the Corporation’s international operations.

The Corporation has loss carryforwards in the U.S. and certain international locations and capital loss carry forwards in Canada and other deductible temporary differences in certain international locations for which it is unlikely that sufficient future taxable income will be available. Accordingly, the Corporation has not recognized a deferred tax asset for the following items:

		2020			2019
Tax losses (Capital)	$		29,809	$		31,033
Tax losses (Income)			72,516			33,221
Deductible temporary differences			2,020			—
Total	$		104,345	$		64,254

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, 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
Recognized in net earnings (loss)			(28,600	)			1,682				(1,601	)			33,141				(615	)			1,120				537				5,664
Recognized in other comprehensive income			—				—				—				(5,398	)			—				—				—				(5,398	)
Effect of foreign currency exchange differences			(4,703	)			—				(3	)			3,843				—				55				15				(793	)
Balance, December 31, 2020	$		393,631		$		2,532		$		6,322		$		(370,439	)	$		2,665		$		(4,956	)	$		(9,617	)	$		20,138