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Income Taxes
 12 Months Ended
Dec. 31, 2024
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, 2024, 2023 and 2022 are as follows:

 

 

2024

 

 

 

Current

 

 

Deferred

 

 

Total

 

US Federal

 

$

—

 

 

$

1,201

 

 

$

1,201

 

US State

 

 

47

 

 

 

—

 

 

 

47

 

Canadian

 

 

30

 

 

 

(2,940

)

 

 

(2,910

)

 

 

$

77

 

 

$

(1,739

)

 

$

(1,662

)

 

 

 

2023

 

 

 

Current

 

 

Deferred

 

 

Total

 

US Federal

 

$

—

 

 

$

3,000

 

 

$

3,000

 

US State

 

 

34

 

 

 

—

 

 

 

34

 

Canadian

 

 

371

 

 

 

4,046

 

 

 

4,417

 

 

 

$

405

 

 

$

7,046

 

 

$

7,451

 

 

 

 

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

 

The (recovery of) provision for income taxes reflected in the consolidated statement of operations for the years ended December 31, 2024, 2023 and 2022 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,

 

 

 

2024

 

 

2023

 

 

2022

 

(Loss) income before income taxes

 

$

(37,305

)

 

$

(27,368

)

 

$

(96,734

)

Tax (recovery) calculated at US domestic tax rates

 

 

(7,834

)

 

 

(5,747

)

 

 

(20,339

)

State tax adjustments

 

 

(364

)

 

 

(457

)

 

 

(1,799

)

Non-deductible items

 

 

920

 

 

 

1,100

 

 

 

928

 

True up of prior year income tax estimates

 

 

(39

)

 

 

318

 

 

 

—

 

Deferred adjustment

 

 

(135

)

 

 

32

 

 

 

(3,324

)

Tax rate differences on deferred items

 

 

(318

)

 

 

(34

)

 

 

308

 

Foreign rate differentials

 

 

—

 

 

 

—

 

 

 

88

 

Change in tax rates

 

 

71

 

 

 

135

 

 

 

5

 

Change in valuation allowance

 

 

6,031

 

 

 

12,111

 

 

 

28,684

 

Other

 

 

6

 

 

 

(7

)

 

 

130

 

Recovery of income taxes

 

$

(1,662

)

 

$

7,451

 

 

$

4,681

 

The statutory tax rate in effect in Canada and the United States for the years ended December 31, 2024, 2023 and 2022 was 27% and 21%, respectively.

The blended effective tax rate for 2024 was 4.5% compared to -27.2% and -4.8% in 2023 and 2022, 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, 2024 and 2023 are as follows:

 

 

2024

 

 

2023

 

Deferred tax assets:

 

 

 

 

 

 

Other assets

 

$

6,969

 

 

$

6,473

 

Long-term debt

 

 

928

 

 

 

824

 

Tax losses: Non-capital and farm losses

 

 

37,563

 

 

 

37,665

 

Provisions: Debt and unit issuance costs

 

 

415

 

 

 

1,058

 

Tax Losses: Capital Losses

 

 

129

 

 

 

—

 

Intangibles

 

 

6,409

 

 

 

3,458

 

Lease Liability

 

 

2,075

 

 

 

2,534

 

Tax losses: Valuation allowance

 

 

(48,561

)

 

 

(42,530

)

 

 

5,927

 

 

 

9,482

 

Deferred tax liabilities:

 

 

 

 

 

 

Joint venture shares

 

 

(2,346

)

 

 

(2,464

)

Cash adjustment

 

 

(10,506

)

 

 

(15,356

)

Right-of-use Assets

 

 

(1,850

)

 

 

(2,371

)

Property, plant and equipment

 

 

(10,160

)

 

 

(11,820

)

 

 

(24,862

)

 

 

(32,011

)

Net deferred tax liabilities

 

$

(18,935

)

 

$

(22,529

)

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, 2024 and 2023 of $48,561 and $42,530, respectively.

Included in the schedule of deferred tax assets and liabilities above are US federal net operating loss carryforwards of approximately $119,095 and $111,831 as of December 31, 2024 and 2023, 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 $46,416 and $43,554 as of December 31, 2024 and 2023, respectively, which will begin to expire in 2029. The Canadian Federal Non-Capital Loss carry forwards are C$50,337 and C$56,009 as of December 31, 2024 and 2023, respectively, which will begin to expire in 2027. The Canadian Provincial Non-Capital Loss carry forwards are C$7,948 and C$13,158, as of December 31, 2024 and 2023, respectively, which will begin to expire in 2036. The Netherlands Federal Non-Capital Losses carry forward is EUR1,122 as of December 31, 2024.

At December 31, 2024 and 2023, 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, 2024 and 2023, 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 the Netherlands and Canada and its provinces. As of December 31, 2024, the Company’s tax years for 2021, 2022 and 2023 are subject to examination by the tax authorities. With few exceptions, as of December 31, 2024, the Company is no longer subject to U.S. federal, state or local examinations by tax authorities for years before 2021 due to the expiration of the statute of limitations.