NOTE 16 – INCOME TAXES
The actual income tax provisions differ from the expected amounts calculated by applying the Canadian combined federal and provincial corporate income tax rates to the Company’s loss before income taxes. The components of these differences are as follows:
| 2017 | 2016 | 2015 | |||||||
| $ | $ | $ | |||||||
| Loss before income taxes | (5,232 | ) | (5,486 | ) | (7,108 | ) | |||
| Corporate tax rate | 26.44% | 26.59% | 26.00% | ||||||
| Expected tax recovery | (1,383 | ) | (1,459 | ) | (1,848 | ) | |||
| Increase (decrease) resulting from: | |||||||||
| Differences in foreign tax rates and change in statutory tax rates | 6,381 | (231 | ) | (989 | ) | ||||
| Impact of foreign exchange rate changes | 1,277 | 506 | (3,005 | ) | |||||
| Change in unrecognized deferred tax assets | (6,507 | ) | 1,290 | 4,509 | |||||
| Stock based compensation and expiry of losses | 33 | 198 | 509 | ||||||
| Non taxable/deductible amounts | 199 | (304 | ) | 824 | |||||
| Deferred income tax recovery | - | - | - |
On December 22, 2017, the United States government enacted the US Tax Cuts and Jobs Act (“Act”). The Act includes a range of legislative changes including a reduction of the US federal corporate income tax rate from 35% to 21% effective January 1, 2018. As a result of these legislative changes, the Company is required to revalue its United States deferred income tax assets and liabilities based on the rates they are expected to reverse at in the future, which is 21% for federal tax purposes. The impact for the Company’s 2017 financial statements is a reduction in deferred income tax assets of $6.38 million.
No deferred tax asset has been recognized in respect of the following losses and deductible temporary differences as it is not considered probable that sufficient future taxable profit will allow the deferred tax assets to be recovered.
| 2017 | 2016 | 2015 | |||||||
| $ | $ | $ | |||||||
| Deferred income tax assets | |||||||||
| Non-capital losses available | 20,998 | 26,679 | 26,547 | ||||||
| Capital losses available | 1,113 | 1,072 | 1,072 | ||||||
| Resource tax pools in excess of net book value | 5,279 | 4,846 | 3,726 | ||||||
| Share issue costs and others | 654 | 1,171 | 1,133 | ||||||
| Unrecognized deferred tax assets | 28,044 | 33,768 | 32,478 |
The Company has the approximate amounts of tax pools available as follows:
| As at December 31 | 2017 | 2016 | 2015 | ||||||
| $ | $ | $ | |||||||
| Canada: | |||||||||
| Exploration and development expenditures | 17,100 | 16,750 | 16,657 | ||||||
| Unamortized share issue costs | 261 | 292 | 455 | ||||||
| Capital losses | 8,242 | 8,242 | 8,242 | ||||||
| Non-capital losses | 33,120 | 30,783 | 29,148 | ||||||
| 58,723 | 56,067 | 54,502 | |||||||
| United States: | |||||||||
| Exploration and development expenditures | 15,883 | 17,149 | 18,560 | ||||||
| Undeducted expenses | 2,760 | 2,954 | 2,737 | ||||||
| Non-capital losses | 53,733 | 58,247 | 57,400 | ||||||
| 72,376 | 78,350 | 78,697 | |||||||
| Total | 131,099 | 134,417 | 133,199 |
The exploration and development expenditures at December 31, 2017 can be carried forward to reduce future income taxes indefinitely. The non-capital losses for income tax purposes expire as follows:
| Canada | United States | Total | |||||||
| $ | $ | $ | |||||||
| 2026 | 24 | 2,531 | 2,555 | ||||||
| 2027 | 3,606 | 3,374 | 6,980 | ||||||
| 2028 | 4,674 | 253 | 4,927 | ||||||
| 2029 | 3,780 | 3,266 | 7,046 | ||||||
| 2030 | 2,068 | 2,775 | 4,843 | ||||||
| 2031 | 2,408 | 2,794 | 5,202 | ||||||
| 2032 | 4,372 | 7,606 | 11,978 | ||||||
| 2033 | 2,167 | 16,215 | 18,382 | ||||||
| 2034 | 3,966 | 12,665 | 16,631 | ||||||
| 2035 | 2,292 | 543 | 2,835 | ||||||
| 2036 | 1,815 | 1,639 | 3,454 | ||||||
| 2037 | 1,948 | 72 | 2,020 | ||||||
| 33,120 | 53,733 | 86,853 |
The Company does not recognize deferred tax assets related to the foregoing tax pools because it is not probable that future taxable profit will be available against which the tax pools can be utilized.