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INCOME TAXES
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
 
The Company’s operations are conducted through various subsidiaries in a number of countries throughout the world. The Company has provided for income taxes based upon the tax laws and rates in the countries in which operations are conducted and income is earned.
 
Income tax expense (benefit). Pre-tax income (loss) for the years ended December 31, 2024, 2023 and 2022 consisted of the following (in thousands): 
 202420232022
Canada operations  $(39,088)$5,524 $3,040 
Foreign operations33,151 34,839 7,692 
Total$(5,937)$40,363 $10,732 
 
The components of the income tax expense (benefit) for the years ended December 31, 2024, 2023 and 2022 consisted of the following (in thousands): 
 202420232022
Current:
Canada 
$41 $142 $31 
Foreign20,110 3,685 194 
Total$20,151 $3,827 $225 
Deferred:
Canada 
$— $— $— 
Foreign(7,659)6,806 4,177 
Total$(7,659)$6,806 $4,177 
Net income tax expense (benefit)$12,492 $10,633 $4,402 

The net income tax expense (benefit) differs from an amount computed at Canadian statutory rates as follows for the years ended December 31, 2024, 2023 and 2022 (in thousands):
 202420232022
Canadian federal tax benefit at statutory rates $(891)15.0 %$6,054 15.0 %$1,610 15.0 %
Canadian provincial income tax(3,186)53.6 %497 1.2 %282 2.6 %
Effect of foreign income tax, net 5,642 (95.0)%5,481 13.6 %1,809 16.9 %
Valuation allowance 8,983 (151.2)%(2,556)(6.3)%153 1.4 %
Noncontrolling interest325 (5.5)%125 0.3 %(562)(5.2)%
Non-deductible compensation1,213 (20.4)%1,009 2.5 %808 7.5 %
Unrealized intercompany foreign currency translation gain(18)0.3 %(148)(0.4)%(250)(2.3)%
Deemed income from foreign subsidiaries243 (4.1)%322 0.8 %331 3.1 %
Other, net181 (3.1)%(151)(0.4)%221 2.0 %
Net income tax expense (benefit)$12,492 (210.4)%$10,633 26.3 %$4,402 41.0 %
 
Deferred Tax Liabilities and Assets. The significant items giving rise to the deferred tax assets and liabilities as of December 31, 2024 and 2023 are as follows (in thousands): 
 20242023
Deferred tax assets:
Net operating loss 
$53,756 $54,274 
Employee benefits 
1,767 1,796 
Deductible goodwill and other intangibles 
42,713 48,201 
Land3,495 3,461 
Other reserves 
8,015 7,890 
Deferred revenue 2,249 2,381 
Operating lease liabilities
3,171 3,199 
Capital losses1,869 2,036 
Other 
2,255 1,770 
Deferred tax assets119,290 125,008 
Valuation allowance 
(81,998)(78,769)
Deferred tax assets, net 
$37,292 $46,239 
Deferred tax liabilities:
Intangibles$(15,135)$(18,949)
Depreciation(22,641)(36,048)
Operating lease right-of-use assets
(3,074)(3,045)
Deferred tax liabilities 
(40,850)(58,042)
Net deferred tax liabilities, net$(3,558)$(11,803)

At December 31, 2024 and 2023, we had no undistributed earnings of foreign subsidiaries that would be subject to income tax upon distribution to Canada from a foreign subsidiary. As such, as of December 31, 2024 and 2023, we did not provide for deferred taxes on any such earnings of our foreign subsidiaries.

NOL Carryforwards. The following summarizes net operating loss (NOL) carryforwards at December 31, 2024 (in thousands): 
 AmountExpiration Period
Net operating loss carryforwards:
Canada – Federal and provincial$134,113 Begins to expire in 2032
U.S. – Federal  34,334 Begins to expire in 2036
U.S. – Federal  39,624 Does not expire
U.S. – State, tax effected6,145 Begins to expire in 2024
 
Change in Valuation Allowance. Realization of our deferred tax assets is dependent upon, among other things, our ability to generate taxable income of the appropriate character in the future.
 
Changes in our valuation allowance for the years ended December 31, 2024 and 2023 are as follows (in thousands): 
 
Balance as of December 31, 2022$(82,905)
Change in income tax provision2,556 
Other change1,767 
Foreign currency translation(187)
Balance as of December 31, 2023$(78,769)
Change in income tax provision(8,983)
Other change910 
Foreign currency translation4,844 
Balance as of December 31, 2024$(81,998)
 
As of each reporting date, management considers new evidence, both positive and negative, that could affect our view of the future realization of deferred tax assets. As of December 31, 2024, management determined that there is not sufficient evidence to conclude that it is more likely than not that the Canadian and U.S. net deferred tax assets are realizable, therefore we have maintained the valuation allowance in both of these jurisdictions. As of December 31, 2024, management determined that there is not sufficient evidence to conclude that it is more likely than not that the Australia deferred tax assets related to certain capital assets are realizable, therefore we have maintained a partial valuation allowance in Australia.

Unrecognized Tax Benefits. We file tax returns in the jurisdictions in which they are required. All of these returns are subject to examination or audit and possible adjustment as a result of assessments by taxing authorities. We believe that we have recorded sufficient tax liabilities and do not expect the resolution of any examination or audit of our tax returns to have a material adverse effect on our operating results, financial condition or liquidity.
 
Our Canadian federal tax returns subsequent to 2019 are subject to audit by the Canada Revenue Agency. Our Australian subsidiary’s federal income tax returns subsequent to 2019 are open for review by the Australian Taxation Office. Our U.S. subsidiary’s federal tax returns subsequent to 2020 are subject to audit by the U.S. Internal Revenue Service.
 
The total amount of unrecognized tax benefits as of December 31, 2024, 2023 and 2022 was zero. Unrecognized tax benefits, if recognized, would affect the effective tax rate. We accrue interest and penalties, if applicable, related to unrecognized tax benefits as a component of our provision for income taxes. As of December 31, 2024, 2023 and 2022, we had accrued zero of interest expense and penalties.