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INCOME TAXES

12 Months Ended

Dec. 31, 2021

21. INCOME TAXES

The reconciliation of the combined Canadian federal and provincial statutory income tax rate of 26.5% for the year ended December 31, 2021 (2020 and 2019 – 26.5%) to the effective tax rate is as follows:

Thousands of United States dollars	2021			2020			2019
Loss before income taxes	$	(21,459	)	$	(14,334	)	$	(2,844	)
Expected income tax recovery based on statutory rate		(5,686	)		(3,798	)		(754	)
Adjustment to expected income tax recovery:
Unrealized loss on investment		621			-			-
Legal settlement		339			-			-
Share based compensation		355			1,299			23
Impairment		-			481			-
Change in statutory, foreign tax, foreign exchange rates and other		(133	)		(795	)		(90	)
Change in benefit of tax assets not recognized and others		4,406			2,813			821
Deferred income tax provision (recovery)	$	(98	)	$	-		$	-

Deferred taxes are a result of temporary differences that arise due to the differences between the income tax values and the carrying values of assets and liabilities.

Thousands of United States dollars	2021		2020		2019
United States non-capital loss carryforwards	$	1,229	$	-	$	-
Total deferred tax assets	$	1,229	$	-	$	-

United States intangible assets	$	2,511	$	-	$	-
United States other accruals		90		-		-
Colombia intangible assets		139		139		-
Total deferred tax liabilities	$	2,740	$	-	$	-

Net deferred income tax liability	$	1,511	$	139	$	-

Deferred income tax assets have not been recognized in respect of the following deductible temporary differences:

Thousands of United States dollars	2021		2020		2019
Non-capital loss carryforwards - Canada	$	21,310	$	9,079	$	2,577
Legal settlement – Canada		400		-		-
Allowance for doubtful accounts – Canada		400		-		-
Share issue costs – Canada		5,996		2,486		-
Non-capital loss carryforwards – United States		1,006		293		343
Non-capital loss carryforwards - Colombia		2,704		2,709		-
Total	$	31,816	$	14,567	$	2,920

Unused loss carryforwards in Canada totaling $21.3 million expire beginning 2039. Unused loss carryforwards in Columbia totaling $2.7 million in Colombia expiring beginning 2031. Unused loss carryforwards in the United States totaling $1.0 million have and indefinite carryforward period. Deferred tax assets have not been recognized for legal entities where it is not probable that future taxable profit will be available against which the Company can use the benefits. Tax attributes are subject to review, and potential adjustment, by tax authorities.

The amount of current income tax expense for the year ended December 31, 2021 was less than $0.1 million and deferred income tax benefit was $0.1 million within the statements of loss. There was no current or deferred income tax expense recorded for the years ended December 31, 2020 and 2019.