INCOME TAXES

The major components of income tax expense for the years ended December 31, 2017 and 2016 are set out below:



FOR THE YEARS ENDED DEC. 31 (MILLIONS)	2017			2016
Current income taxes	$	286		$	213
Deferred income tax expense/(recovery)
Origination and reversal of temporary differences	499			384
Recovery arising from previously unrecognized tax assets	3			27
Change of tax rates and new legislation	(175		)	(969		)
Total deferred income taxes	327			(558		)
Income taxes	$	613		$	(345	)

The company’s Canadian domestic statutory income tax rate has remained consistent at 26% throughout both of 2017 and 2016. The company’s effective income tax rate is different from the company’s domestic statutory income tax rate due to the following differences set out below:



FOR THE YEARS ENDED DEC. 31	2017		2016
Statutory income tax rate	26	%	26	%
Increase (reduction) in rate resulting from:
Change in tax rates and new legislation	(3	)	(35	)
International operations subject to different tax rates	3		(5	)
Taxable income attributable to non-controlling interests	(9	)	(2	)
Portion of gains subject to different tax rates	(5	)	(1	)
(Recognition) derecognition of deferred tax assets	(2	)	1
Non-recognition of the benefit of current year’s tax losses	3		6
Other	(1	)	(2	)
Effective income tax rate	12	%	(12	)%

Deferred income tax assets and liabilities as at December 31, 2017 and 2016 relate to the following:



AS AT DEC. 31 (MILLIONS)	2017			2016
Non-capital losses (Canada)	$	657		$	814
Capital losses (Canada)	171			100
Losses (U.S.)	590			492
Losses (International)	861			481
Difference in basis	(12,224		)	(9,965		)
Total net deferred tax liabilities	$	(9,945	)	$	(8,078	)

The aggregate amount of temporary differences associated with investments in subsidiaries for which deferred tax liabilities have not been recognized as at December 31, 2017 is approximately $5 billion (2016 – approximately $5 billion).

The company regularly assesses the status of open tax examinations and its historical tax filing positions for the potential for adverse outcomes to determine the adequacy of the provision for income and other taxes. The company believes that it has adequately provided for any tax adjustments that are more likely than not to occur as a result of ongoing tax examinations or historical filing positions.

The dividend payment on certain preferred shares of the company results in the payment of cash taxes in Canada and the company obtaining a deduction based on the amount of these taxes.

The following table details the expiry date, if applicable, of the unrecognized deferred tax assets:



AS AT DEC. 31 (MILLIONS)	2017		2016
One year from reporting date	$	—	$	26
Two years from reporting date	—		—
Three years from reporting date	6		59
After three years from reporting date	530		555
Do not expire	990		845
Total	$	1,526	$	1,485

The components of the income taxes in other comprehensive income for the years ended December 31, 2017 and 2016 are set out below:



FOR THE YEARS ENDED DEC. 31 (MILLIONS)	2017			2016
Revaluation of property, plant and equipment	$	(315	)	$	120
Financial contracts and power sale agreements	27			(37		)
Available-for-sale securities	5			38
Foreign currency translation	(43		)	59
Revaluation of pension obligation	1			(7		)
Total deferred tax in other comprehensive income	$	(325	)	$	173