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Income Taxes | 12 Months Ended
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Jan. 01, 2022
Income Tax Disclosure [Abstract] |
Income Taxes [Text Block] | 19. Income Taxes The income tax benefit differs from the amount that would have resulted from applying the combined Canadian federal and provincial statutory income tax rate to loss from continuing operations before income taxes due to the following:
|  | January 1, 2022 |  |  | January 2, 2021 |  |  | December 28, 2019 |
|  | $ |  |  | $ |  |  | $ |
Loss from continuing operations |  | (7,510 | ) |  | (50,042 | ) |  | (16,181 | )
Canadian statutory rate |  | 26.5% |  |  | 26.5% |  |  | 26.5% |
Income tax benefit at statutory rate |  | (1,990 | ) |  | (13,261 | ) |  | (4,288 | )
Stock-based compensation |  | 2,166 |  |  | 3,169 |  |  | 1,975 |
Change in valuation allowance |  | 975 |  |  | 560 |  |  | (113 | )
Disallowed executive compensation |  | 138 |  |  | 2,801 |  |  | - |
Foreign tax rate differential |  | (31 | ) |  | (105 | ) |  | 126 |
Change in enacted tax rates |  | (442 | ) |  | 250 |  |  | (549 | )
CARES Act |  | - |  |  | 2,472 |  |  | - |
Other |  | (4,182 | ) |  | 1,374 |  |  | (252 | )
Income tax benefit |  | (3,366 | ) |  | (2,740 | ) |  | (3,101 | )
The components of earnings (loss) from continuing operations before income taxes are shown below:
|  | January 1, 2022 |  |  | January 2, 2021 |  |  | December 28, 2019 |
|  | $ |  |  | $ |  |  | $ |
Canada |  | (10,797 | ) |  | (14,700 | ) |  | (11,295 | )
U.S. |  | 3,945 |  |  | (34,521 | ) |  | (5,548 | )
Other |  | (658 | ) |  | (821 | ) |  | 662 |
Loss from continuing operations before income taxes |  | (7,510 | ) |  | (50,042 | ) |  | (16,181 | )
The components of income tax expense (benefit) are shown below:
|  | January 1, 2022 |  |  | January 2, 2021 |  |  | December 28, 2019 |
|  | $ |  |  | $ |  |  | $ |
Current income tax expense (benefit): |  |  |  |  |  |  |  |  |
Canada |  | (9 | ) |  | (154 | ) |  | (1,023 | )
U.S. |  | (75 | ) |  | (14,148 | ) |  | (3,424 | )
Other |  | (359 | ) |  | 589 |  |  | 532 |
|  | (443 | ) |  | (13,713 | ) |  | (3,915 | )
Deferred income tax expense (benefit): |  |  |  |  |  |  |  |  |
Canada |  | 299 |  |  | (291 | ) |  | 33 |
U.S. |  | (3,067 | ) |  | 10,442 |  |  | 731 |
Other |  | (155 | ) |  | 822 |  |  | 50 |
|  | (2,923 | ) |  | 10,973 |  |  | 814 |
Income tax benefit |  | (3,366 | ) |  | (2,740 | ) |  | (3,101 | )
Deferred income taxes of the Company are comprised of the following:
|  | January 1, 2022 |  |  | January 2, 2021 |
|  | $ |  |  | $ |
Differences in property, plant and equipment and intangible assets |  | (54,761 | ) |  | (55,105 | )
Capital and non-capital losses |  | 21,540 |  |  | 14,388 |
Interest expense limitation (163j) |  | 10,521 |  |  | 11,069 |
Tax benefit of scientific research expenditures |  | 2,744 |  |  | 2,699 |
Inventory basis differences |  | 1,148 |  |  | 1,303 |
Other accrued reserves |  | 1,590 |  |  | 4,522 |
|  | (17,218 | ) |  | (21,124 | )
Less: valuation allowance |  | 5,267 |  |  | 4,284 |
Deferred income tax liability |  | (22,485 | ) |  | (25,408 | )
T he components of the deferred income tax liability are shown below:
|  | January 1, 2022 |  |  | January 2, 2021 |
|  | $ |  |  | $ |
Canada |  | (325 | ) |  | (26 | )
U.S. |  | (22,083 | ) |  | (25,150 | )
Other |  | (77 | ) |  | (232 | )
Deferred income tax liability |  | (22,485 | ) |  | (25,408 | )
The components of the deferred income tax valuation allowance are as follows:
|  | January 1, 2022 |  |  | January 2, 2021 |
|  | $ |  |  | $ |
Balance, beginning of year |  | 4,284 |  |  | 6,219 |
Increase (decrease) in valuation allowance |  | 983 |  |  | (1,935 | )
Balance, end of year |  | 5,267 |  |  | 4,284 |
As at January 1, 2022, the Company had approximately $1.6 million (January 2, 2021 - $1.5 million) in U.S. federal scientific research investment tax credits and $0.9 million (January 2, 2021 - $0.9 million) in U.S. state research and development tax credits, which will expire in varying amounts between 2022 and 2029. As at January 1, 2022, the Company had U.S. federal non-capital loss carryforwards of approximately $64.8 million (January 2, 2021 - $37.1 million). In addition, the Company had state loss carryforwards of approximately $3.3 million as at January 1, 2022 (January 2, 2021 - $8.7 million). These amounts are available to reduce future federal and state income taxes. As at January 1, 2022, the Company had Canadian capital losses of approximately $27.8 million (January 2, 2021 - $27.9 million) for which a full valuation allowance exists. These amounts are available to reduce future capital gains and do not expire. In addition, the Company had Canadian non-capital loss carryforwards of approximately $6.0 million (January 2, 2021 - $2.8 million). These amounts are available to reduce future taxable income and do not begin to expire until 2040. The Company records net deferred tax assets to the extent it believes these assets will more likely than not be realized. In making such determinations, the Company considers all available positive and negative evidence, including future reversals of existing temporary differences, projected future taxable income, tax planning strategies and recent financial operations. Based on this evaluation, as at January 1, 2022, a valuation allowance of $5.3 million (January 2, 2021 - $4.3 million) had been recorded against certain assets to reduce the net benefit recorded in the consolidated financial statements. As the undistributed earnings of the Company's non-Canadian affiliates and associated companies are considered to be indefinitely reinvested, no provision for deferred taxes has been provided thereon. For the years ended January 1, 2022, January 2, 2021 and December 28, 2019, the Company did not identify any material uncertain tax positions or recognize any related tax benefits. The Company believes it has adequately examined its tax positions taken or expected to be taken in a tax return; however, amounts asserted by taxing authorities could differ from the Company's positions. Accordingly, additional provisions on federal, provincial, state, and foreign tax-related matters could be recorded in the future as revised estimates are made or the underlying matters are settled or otherwise resolved. Consistent with its historical financial reporting, the Company has classified interest and penalties related to income tax liabilities, when applicable, as part of interest expense in its consolidated statements of operations, and with the related liability on the consolidated balance sheets. The number of years with open tax audits varies depending on the tax jurisdiction. The Company's major taxing jurisdictions are the U.S. (including multiple states) and Canada (Ontario). The Company's 2018 through 2020 tax years (and any tax year for which available non-capital loss carryforwards were generated up to the amount of non-capital loss carryforward) remain subject to examination by the Internal Revenue Service for U.S. federal tax purposes, and tax years 2014 through 2020 remain subject to examination by the appropriate governmental agencies for Canadian federal tax purposes. There are other ongoing audits in various other jurisdictions that are not considered material to the Company's consolidated financial statements.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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