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Income Taxes
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Income Taxes

13. INCOME TAXES

The components of the provision for (recovery of) income tax for the years ended December 31, 2023, 2022 and 2021 are as follows:

 

 

2023

 

 

 

Current

 

 

Deferred

 

 

Total

 

US Federal

 

$

—

 

 

$

—

 

 

$

—

 

US State

 

 

34

 

 

 

—

 

 

 

34

 

Canadian

 

 

371

 

 

 

4,046

 

 

 

4,417

 

 

 

$

405

 

 

$

4,046

 

 

$

4,451

 

 

 

 

2022

 

 

 

Current

 

 

Deferred

 

 

Total

 

US Federal

 

$

—

 

 

$

14,650

 

 

$

14,650

 

US State

 

 

72

 

 

 

(2,085

)

 

 

(2,013

)

Canadian

 

 

(5,222

)

 

 

(2,734

)

 

 

(7,956

)

 

 

$

(5,150

)

 

$

9,831

 

 

$

4,681

 

 

 

 

2021

 

 

 

Current

 

 

Deferred

 

 

Total

 

US Federal

 

$

—

 

 

$

(3,278

)

 

$

(3,278

)

US State

 

 

135

 

 

 

(176

)

 

 

(41

)

Canadian

 

 

(795

)

 

 

588

 

 

 

(207

)

 

 

$

(660

)

 

$

(2,866

)

 

$

(3,526

)

The (recovery of) provision for income taxes reflected in the consolidated statements of (loss) income for the years ended December 31, 2023, 2022 and 2021 differs from the amounts computed at the federal statutory tax rates. The principal differences between the statutory income tax (recovery) and the effective provision for (recovery of) income taxes are summarized as follows:

 

 

Year Ended December 31,

 

 

 

2023

 

 

2022

 

 

2021

 

(Loss) income before income taxes

 

$

(27,368

)

 

$

(96,734

)

 

$

(12,651

)

Tax (recovery) calculated at US domestic tax rates

 

 

(5,747

)

 

 

(20,339

)

 

 

(2,592

)

State tax adjustments

 

 

(457

)

 

 

(1,799

)

 

 

(230

)

Non-deductible items

 

 

1,100

 

 

 

928

 

 

 

1,516

 

True up of prior year income tax estimates

 

 

318

 

 

 

—

 

 

 

(648

)

Deferred adjustment

 

 

32

 

 

 

(3,324

)

 

 

(2,429

)

Tax rate differences on deferred items

 

 

(34

)

 

 

308

 

 

 

397

 

Foreign rate differentials

 

 

—

 

 

 

88

 

 

 

86

 

Change in tax rates

 

 

135

 

 

 

5

 

 

 

5

 

Change in valuation allowance

 

 

9,111

 

 

 

28,684

 

 

 

57

 

Other

 

 

(7

)

 

 

130

 

 

 

312

 

Recovery of income taxes

 

$

4,451

 

 

$

4,681

 

 

$

(3,526

)

 

The statutory tax rate in effect in Canada and the United States for the year ended December 31, 2023, 2022 and 2021 was 27%, 21%, respectively.

The blended effective tax rate for 2023 was (16.3%) compared to (4.8%) and 27.9% in 2022 and 2021, respectively.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

The deferred tax assets and liabilities presented on the consolidated statements of financial position are net amounts corresponding to their reporting jurisdiction. The deferred tax assets and liabilities presented in the note disclosure are grouped based on asset and liability classification without consideration of their corresponding reporting jurisdiction.

Significant components of the Company’s net deferred income taxes at December 31, 2023 and 2022 are as follows:

 

 

2023

 

 

2022

 

Deferred tax assets:

 

 

 

 

 

 

Other assets

 

$

6,636

 

 

$

5,536

 

Long-term debt

 

 

824

 

 

 

943

 

Tax losses: Non-capital and farm losses

 

 

37,665

 

 

 

33,579

 

Provisions: Debt and unit issuance costs

 

 

1,058

 

 

 

1,683

 

Tax losses: Valuation allowance

 

 

(39,530

)

 

 

(30,419

)

 

 

6,653

 

 

 

11,322

 

Deferred tax liabilities:

 

 

 

 

 

 

Joint venture shares

 

 

(2,464

)

 

 

(2,406

)

Cash adjustment

 

 

(15,356

)

 

 

(12,861

)

Property, plant and equipment

 

 

(8,362

)

 

 

(11,610

)

 

 

(26,182

)

 

 

(26,877

)

Net tax assets

 

$

(19,529

)

 

$

(15,555

)

In assessing the ability to realize deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based upon available positive and negative evidence and future taxable income, the Company has recorded a valuation allowance on its deferred tax assets for the years ended December 31, 2023 and 2022 of $39,530 and $30,419, respectively.

Included in the schedule of deferred tax assets and liabilities above are US federal net operating loss carryforwards of approximately $111,831 and $106,428 as of December 31, 2023 and 2022, respectively, which will begin to expire in 2031. At the state level, the Company has a combined state net operating loss carry forwards of approximately $43,554 and $42,768 as of December 31, 2023 and 2022, respectively, which started to expire in 2023. The Canadian Federal Non-Capital Loss carry forwards are $56,009 and $43,829 as of December 31, 2023 and 2022, respectively. The Canadian Provincial Non-Capital Loss carry forwards are $13,158 and $15,974, as of December 31, 2023 and 2022, respectively.

At December 31, 2023 and 2022, the balance of uncertain tax benefits is zero. The Company does not anticipate that the amount of the uncertain tax benefit will significantly increase within the next 12 months. The Company recognizes accrued interest related to uncertain tax benefits and penalties as income tax expense. As of December 31, 2023 and 2022, there are no recognized liabilities for interest or penalties.

The Company is subject to taxation in the U.S. and various states, as well as Canada and its provinces. As of December 31, 2023, the Company’s tax years for 2020, 2021 and 2022 are subject to examination by the tax authorities. With few exceptions, as of December 31, 2023, the Company is no longer subject to U.S. federal, state or local examinations by tax authorities for years before 2020 due to the expiration of the statute of limitations.