Annual reports filed by certain Canadian issuers pursuant to Section 15(d) and Rule 15d-4

Deferred income taxes

v3.19.1
Deferred income taxes
12 Months Ended
Dec. 31, 2018
Major components of tax expense (income) [abstract]  
Deferred income taxes
15 Deferred income taxes

 

a) Reconciliation of total tax recovery

The effective rate on the Corporation’s loss before income tax differs from the expected amount that would arise using the statutory income tax rates. A reconciliation of the difference is as follows:

  2018   2017  
  $   $  
 
Loss before income taxes (21,935 ) (12,027 )
 
Income tax rate 30.0 % 31.0 %
 
  (6,581 ) (3,728 )
 
Effect on income taxes of:        

Non-deductible share-based compensation

507   533  

Unrecognized deductible temporary difference and carry forward amounts and experimental development expenditures

6,040   3,184  

Other non-deductible items

34   11  
 
Income tax recovery    

 

b) Deferred income tax

The significant components of the Corporation’s deferred income tax are as follows:

  2018 2017
  $ $
Deferred income tax liabilities:    

Intangibles

 
Deferred income tax assets:    

Non-capital losses

   
 
Net deferred income tax liability    

The following reflects the balance of temporary differences for which no deferred income tax asset has been recognized:

  2018 2017
  $ $
 

Non-capital losses

63,230 43,719

Scientific research and experimental development expenditures

20,096 13,906

Non-refundable investment tax credits

3,832 2,801

Deductible share issuance costs

2,028 1,846

Long-term debt

7,612 6,243

Property and equipment

725 1,144

c) Non-capital losses

As at December 31, 2018, the Corporation had approximately $63,230 in losses available to reduce future taxable income. The benefit of these losses has not been recorded in the accounts as realization is not considered probable. These losses may be claimed no later than:

  $
For the year ending December 31, 2025 1,000
2026 1,100
2027 1,470
2028 1,770
2029 660
2030 2,640
2031 5,180
2032 4,110
2033 4,270
2034 3,400
2035 7,560
2036 5,100
2037 6,700
2038 18,270  
  63,230  

 

d) Scientific research and experimental development expenditures

The Corporation has approximately $20,096 of unclaimed scientific research and development expenditures, which may be carried forward indefinitely and used to reduce taxable income in future years. The potential income tax benefits associated with the unclaimed scientific research and experimental development expenditures have not been recognized in the accounts as realization is not considered probable.

e) Non-refundable investment tax credits

The Corporation also has approximately $3,832 in non-refundable federal investment tax credits which may be carried forward to reduce taxes payable. These tax credits will be fully expired by 2038. The benefit of these tax credits has not been recorded in the accounts as realization is not considered probable.