13. Income Taxes

The Company’s U.S. and foreign source income/(loss) is as follows:


	Years ended December 31,
	2016		2015		2014
U.S.	$	1,219	$	(3,297)	$	(6,705)
Canada		(1,395)		(121)		(7,750)
Other Foreign		(2,957)		4,429		(4,471)
	$	(3,133)	$	1,011	$	(18,926)

During the years ended December 31, 2016, 2015 and 2014, the Company has recognized ‘nil’ current and deferred income tax expense or benefit in each of the US, Canadian, and other foreign jurisdictions, due to full valuation allowances within each jurisdiction.

Rate Reconciliation

A reconciliation of the combined income taxes at the statutory rates and the Company’s effective income tax benefit is as follows:


	Years ended December 31,
	2016		2015		2014
Income taxed at statutory rates	$	(1,226)	$	392	$	(7,314)
Increase (decrease) in taxes from:
Stock-based compensation		(382)		32		41
Other adjustments		15		27		5
Adjustment due to capital transactions				(119)		—
R&D grant		5,936		5,366		—
Prior year provision to actual adjustments		(4,269)		(2,894)		(4,511)
Differences in tax rates		524		(368)		541
Effect of foreign exchange		379		350		276
Expiration of NOLs		-		231		189
Change in valuation allowance		(977)		(3,017)		10,773
Income tax (benefit)/expense	$	—	$	—	$	—

Deferred Taxes

Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The significant components of our deferred tax assets and liabilities as at December 31 are as follows:


	December 31,
	2016		2015		2014
Deferred income tax assets
Excess tax basis over book basis of property, plant and equipment	$	7,773	$	7,785	$	7,893
Marketable securities		713		862		798
Operating loss carryforwards		27,943		26,464		35,001
Capital loss carryforwards		13,469		13,463		10,212
Other		1,783		2,725		2,891
Total future tax assets		51,681		51,299		56,795
Valuation allowance for future tax assets		(50,209)		(50,816)		(54,397)
		1,472		483		2,398
Deferred income tax liabilities
Other investments		1,472		483		1,916
Amayapampa disposal consideration		—		—		482
		1,472		483		2,398

Total Deferred Taxes	$	—	$	—	$	—

Valuation Allowance on Canadian and Foreign Tax Assets

We establish a valuation allowance against the future income tax assets if, based on available information, it is more likely than not that all of the assets will not be realized. The valuation allowance of $50,209, $50,816, and $54,397 at December 31, 2016, 2015 and 2014, respectively, relates mainly to net operating loss carryforwards, in Canada and other foreign tax jurisdictions, where the utilization of such attributes is not more likely than not. The Company continually assesses both positive and negative evidence to determine whether it is more likely than not that deferred tax assets can be realized prior to their expiration.

Loss Carryforwards

The Company has available income tax losses of $67,822, which may be carried forward and applied against future taxable income when earned.

The losses expire as follows:


	Noncapital Canada (1)		U.S.		Mexico		Barbados		Total
2016	$	—	$	—	$	—	$	(2)	$	(2)
2017		—		—		—		(1)		(1)
2018		—		—		—		(6)		(6)
2019		—		—		—		(20)		(20)
2020		—		—		—		(42)		(42)
2021		—		—		—		(20)		(20)
2022		—		—		(5,511)		(31)		(5,542)
2023		—		—		(302)		(23)		(325)
2024		—		—		—		(4)		(4)
2025		—		—		—		(6)		(6)
2026		(1,027)		—		—		—		(1,027)
2027		(847)		(1,287)		—		—		(2,134)
2028		(5,245)		(1,719)		—		—		(6,964)
2029		(4,022)		(1,970)		—		—		(5,992)
2030		(5,032)		(1,827)		—		—		(6,859)
2031		(3,806)		(3,407)		—		—		(7,213)
2032		(6,397)		(2,323)		—		—		(8,720)
2033		(6,076)		(3,098)		—		—		(9,174)
2034		(4,420)		(2,824)		—		—		(7,244)
2035		(3,729)		—						(3,729)
2036		(2,798)		—						(2,798)
	$	(43,399)	$	(18,455)	$	(5,813)	$	(155)	$	(67,822)

(1)

Canadian capital loss carryforwards of $55,367 and Australian NOLs of $25,909, which do not expire and are therefore not included above.

During 2016, an income tax benefit and the corresponding valuation allowance of $370 related to share-issuance cost was recorded directly to equity.

Accounting for uncertainty in taxes

Accounting Standards Codification Topic 740 guidance requires that the Company evaluate all income tax positions taken, and recognize a liability for any uncertain tax positions that are not more likely than not to be sustained by the tax authorities. As of December 31, 2016, the Company believes it has no liability for unrecognized tax positions. If the Company were to determine there were any uncertain tax positions, the Company would recognize the liability and related interest and penalties within income tax expense.

Tax statute of limitations

The Company files income tax returns in Canada, U.S. federal and state jurisdictions and other foreign jurisdictions. There are currently no tax examinations underway for these jurisdictions. Furthermore, the Company is no longer subject to Canadian tax examinations by the Canadian Revenue Authority for years ended on or before December 31, 2013 or U.S. federal income tax examinations by the Internal Revenue Service for years ended on or before December 31, 2013. Some U.S. state and other foreign jurisdictions are still subject for tax examination for years ended on or before December 31, 2012.

Although certain tax years are closed under the statute of limitations, tax authorities can still adjust losses being carried forward into open years.