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Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2023
Net deferred tax assets and liabilities [abstract] |
Income Taxes | NOTE 13. 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:
|  | 2023 |  |  | 2022 |
Earnings (loss) before income taxes | $ |  | 265,779 |  | $ |  | (14,143 | )
Federal and provincial statutory rates |  |  | 24 | % |  |  | 24 | %
Tax at statutory rates | $ |  | 63,787 |  | $ |  | (3,394 | )
Adjusted for the effect of: |  |  |  |  |  |
Non-deductible expenses |  |  | 2,426 |  |  |  | 1,146 |
Non-taxable capital gains |  |  | (2,551 | ) |  |  | (379 | )
Gain on acquisition |  |  | (6,222 | ) |  |  | — |
Impact of foreign tax rates |  |  | (2,450 | ) |  |  | (2,559 | )
Withholding taxes |  |  | 337 |  |  |  | 1,026 |
Taxes related to prior years |  |  | (4,945 | ) |  |  | 1,718 |
Tax assets not recognized |  |  | 8,629 |  |  |  | 22,592 |
Deferred tax assets recognized |  |  | (82,476 | ) |  |  |
Income tax expense (recovery) | $ |  | (23,465 | ) | $ |  | 20,150 |
The net deferred tax liability is comprised of the tax effect of the following temporary differences:
|  | 2023 |  |  | 2022 |
Deferred tax liability: |  |  |  |  |  |
Property, plant and equipment and intangibles | $ |  | 358,170 |  | $ |  | 364,278 |
Debt issue costs |  |  | 928 |  |  |  | 1,303 |
Partnership deferrals |  |  | — |  |  |  | 21,768 |
Other |  |  | 6,741 |  |  |  | 6,284 |
|  |  | 365,839 |  |  |  | 393,633 |
Offsetting of assets and liabilities |  |  | (292,324 | ) |  |  | (364,687 | )
| $ |  | 73,515 |  | $ |  | 28,946 |
Deferred tax assets: |  |  |  |  |  |
Losses (expire from time to time up to 2042) | $ |  | 332,192 |  | $ |  | 318,967 |
Long-term incentive plan |  |  | 21,770 |  |  |  | 36,542 |
Other |  |  | 12,024 |  |  |  | 9,633 |
|  |  | 365,986 |  |  |  | 365,142 |
Offsetting of assets and liabilities |  |  | (292,324 | ) |  |  | (364,687 | )
| $ |  | 73,662 |  | $ |  | 455 |
Net deferred tax liability | $ |  | (147 | ) | $ |  | 28,491 |
The Corporation has loss carry forwards 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:
|  | 2023 |  |  | 2022 |
Tax losses (Capital) | $ |  | 17,247 |  | $ |  | 29,255 |
Tax losses (Income) |  |  | 23,446 |  |  |  | 134,588 |
Deductible temporary differences |  |  | 5,246 |  |  |  | 5,224 |
Total | $ |  | 45,939 |  | $ |  | 169,067 |
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, 2021 | $ |  | 359,383 |  | $ |  | 11,082 |  | $ |  | 6,221 |  | $ |  | (340,406 | ) | $ |  | 1,457 |  | $ |  | (14,264 | ) | $ |  | (12,121 | ) | $ |  | 11,352 |
Recognized in net earnings (loss) |  |  | (10,047 | ) |  |  | 10,686 |  |  |  | 51 |  |  |  | 33,827 |  |  |  | (154 | ) |  |  | (21,583 | ) |  |  | 3,008 |  |  |  | 15,788 |
Foreign exchange |  |  | 14,942 |  |  |  | — |  |  |  | 12 |  |  |  | (12,388 | ) |  |  | — |  |  |  | (695 | ) |  |  | (520 | ) |  |  | 1,351 |
Balance, December 31, 2022 | $ |  | 364,278 |  | $ |  | 21,768 |  | $ |  | 6,284 |  | $ |  | (318,967 | ) | $ |  | 1,303 |  | $ |  | (36,542 | ) | $ |  | (9,633 | ) | $ |  | 28,491 |
Recognized in net earnings (loss) |  |  | (11,063 | ) |  |  | (21,768 | ) |  |  | (231 | ) |  |  | (6,792 | ) |  |  | (375 | ) |  |  | 14,583 |  |  |  | (2,313 | ) |  |  | (27,959 | )
Acquisition |  |  | 9,865 |  |  |  | — |  |  |  | 694 |  |  |  | (9,358 | ) |  |  | — |  |  |  | — |  |  |  | (237 | ) |  |  | 964 |
Foreign exchange |  |  | (4,910 | ) |  |  | — |  |  |  | (6 | ) |  |  | 2,925 |  |  |  | — |  |  |  | 189 |  |  |  | 159 |  |  |  | (1,643 | )
Balance, December 31, 2023 | $ |  | 358,170 |  | $ |  | — |  | $ |  | 6,741 |  | $ |  | (332,192 | ) | $ |  | 928 |  | $ |  | (21,770 | ) | $ |  | (12,024 | ) | $ |  | (147 | )
In December 2021, the Organization for Economic Co-operation and Development issued model rules for a new global minimum tax framework (Pillar Two). Under Pillar Two legislation, Precision is liable to pay a top-up tax for differences between its Global Anti-Base Erosion effective tax rate and the 15% minimum tax rate. In May 2023, the IASB issued amendments to IAS 12, Income Taxes to address Pillar Two, which provided clarity on the impacts and additional disclosure requirements once legislation is substantively enacted. For jurisdictions where Precision operates that have substantially enacted the Pillar Two legislation, there is no material impact to the Company. Precision also operates in jurisdictions where it is expected that Pillar Two legislation will be enacted in the future. For these jurisdictions, Precision has assessed its exposure to the Pillar Two legislation and foresees no material impact to the Company.

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