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Income taxes
 12 Months Ended
Oct. 31, 2022
Text Block [Abstract]  
Income taxes
Note 
19
  
Income taxes
 
Total income taxes
 
$ millions, for the year ended October 31
  
2022
 
 
2021
 
Consolidated statement of income
  
      
 
      
Provision for (reversal of) current income taxes
  
      
 
      
Adjustments for prior years
   
$
35
 
    $ (22 ) 
Current income tax expense
   
 
1,741
 
      1,939  
    
 
1,776
 
      1,917  
Provision for (reversal of) deferred income taxes
                  
Adjustments for prior years
   
 
(27
)
  
   19  
Effect of changes in tax rates and laws
   
 
(4
)
  
   1  
Origination and reversal of temporary differences
   
 
(15
)
  
   (61 ) 
    
 
(46
)
  
   (41 ) 
    
 
1,730
 
  
   1,876  
OCI
   
 
(268
)
  
   297  
Total comprehensive income
   
$
 
 
 
 
1,462
      $     2,173  
Components of income tax

 
$ millions, for the year ended October 31
  
2022
 
  
2021
 
Current income taxes
  
      
  
      
Federal
   
$
627
 
    $ 918  
Provincial
   
 
429
 
      629  
Foreign
   
 
459
 
      398  
    
 
1,515
 
      1,945  
Deferred income taxes
                  
Federal
   
 
51
 
      137  
Provincial
   
 
37
 
      90  
Foreign
   
 
(141
)
  
   1  
    
 
(53
)
  
   228  
   
$
      1,462
 
    $     2,173  
The combined Canadian federal and provincial income tax rate varies each year according to changes in the statutory rates imposed by each of these jurisdictions, and according to changes in the proportion of our business carried out in each province. We are also subject to Canadian taxation on income of foreign branches.
Earnings of foreign subsidiaries would generally only be subject to Canadian tax when distributed to Canada. Additional Canadian taxes that would be payable if all foreign subsidiaries’ retained earnings were distributed to the Canadian parent as dividends are estimated to be nil.
The effective rates of income tax in the consolidated statement of income are different from the combined Canadian federal and provincial income tax rates as set out in the following table:
Reconciliation of income taxes
 
$ millions, for the year ended October 31
  
2022
 
  
2021
 
Combined Canadian federal and provincial income tax rate applied to income before
income taxes
   
$
2,097
 
   
 
26.3
 % 
    $ 2,188        26.3  % 
Income taxes adjusted for the effect of:
                                    
Earnings of foreign subsidiaries
   
 
(199
)
   
 
(2.5
)
      (136 )       (1.6 ) 
Tax-exempt income
   
 
(156
)
   
 
(2.0
)
      (150 )       (1.8 ) 
Changes in income tax rate on deferred tax balances
   
 
(4
)
   
 
–
 
      1        –
 
Impact of equity-accounted income
   
 
(13
)
   
 
(0.2
)
      (13 )       (0.2 ) 
Other
   
 
5
 
   
 
0.1
 
      (14 )       (0.2 ) 
Income taxes in the consolidated statement of income
   
$
     1,730
 
   
 
       21.7
 % 
    $     1,876        22.5  % 
 
Deferred income taxes
Sources of and movement in deferred tax assets and liabilities
Deferred tax assets
$ millions, for the year ended October 31
 
Allowance
for credit
losses
 
 
Property
and
equipment
 
 
Pension and
employee
benefits
 
 
Provisions
 
 
Financial
instrument
revaluation
 
 
Tax loss
carry-
forwards 
(1)
 
 
Other
 
 
Total
assets
 
2022
   
Balance at beginning of year
  
$
222
 
  
$
40
 
  
$
307
 
  
$
103
 
  
$
24
 
  
$
5
 
  
$
215
 
  
$
916
 
    
Recognized in net income
  
 
24
 
  
 
3
 
  
 
(25
)
  
 
(12
)
  
 
(3
)
  
 
2
 
  
 
49
 
  
 
38
 
    
Recognized in OCI
  
 
–
 
  
 
–
 
  
 
(16
)
  
 
–
 
  
 
104
 
  
 
–
 
  
 
–
 
  
 
88
 
    
Other
(2)
  
 
10
 
  
 
(37
)
  
 
9
 
  
 
1
 
  
 
–
 
  
 
(1
)
  
 
–
 
  
 
(18
)
    
Balance at end of year
  
$
256
 
  
$
6
 
  
$
275
 
  
$
92
 
  
$
125
 
  
$
6
 
  
$
264
 
  
$
1,024
 
2021   
Balance at beginning of year
   $ 314     $ 39     $ 554     $ 53     $ 1     $ 19     $ 236     $ 1,216  
    
Recognized in net income
     (80 )      3       59       51       (7 )      (3 )      (16 )      7  
    
Recognized in OCI
     –       –       (296 )      –       43       –       –       (253 ) 
    
Other
(2)
     (12 )      (2 )      (10 )      (1 )      (13 )      (11 )      (5 )      (54 ) 
    
Balance at end of year
   $     222     $     40     $      307     $     103     $      24     $ 5     $     215     $       916  
Deferred tax liabilities
$ millions, for the year ended October 31
 
Intangible
assets
 
 
Property
and
equipment
 
 
Pension and
employee
benefits
 
 
Goodwill
 
 
Financial
instrument
revaluation
 
 
Other
 
 
Total
liabilities
 
2022
   
Balance at beginning of year
  
$
(327
) 
  
$
(82
) 
  
$
(24
) 
  
$
(88
) 
  
$
(19
) 
  
$
(12
) 
  
$
(552
) 
    
Recognized in net income
  
 
(10
)
  
 
(23
)
  
 
33
 
  
 
(2
)
  
 
4
 
  
 
6
 
  
 
8
 
    
Recognized in OCI
  
 
–
 
  
 
–
 
  
 
(81
)
  
 
–
 
  
 
–
 
  
 
–
 
  
 
(81
)
    
Other
(2)
  
 
(4
)
  
 
36
 
  
 
1
 
  
 
1
 
  
 
2
 
  
 
–
 
  
 
36
 
    
Balance at end of year
  
$
    (341
) 
  
$
      (69
) 
  
$
    (71
) 
  
$
    (89
) 
  
$
    (13
) 
  
$
    (6
) 
  
$
    (589
) 
2021   
Balance at beginning of year
   $ (305 )    $ (112 )    $ (15 )    $ (86 )    $ (63 )    $ (18 )    $ (599 ) 
    
Recognized in net income
     (26 )      27       1       (2 )      28       6       34  
    
Recognized in OCI
     –       –       (15 )      –       (1 )      –       (16 ) 
    
Other
(2)
     4       3       5       –       17       –       29  
    
Balance at end of year
   $ (327 )    $ (82 )    $ (24 )    $ (88 )    $ (19 )    $ (12 )    $ (552 ) 
Net deferred tax assets as at October 31, 2022
 
  
$
435
 
Net deferred tax assets as at October 31, 2021
     $ 364  
 
(1)
The deferred tax effect of tax loss carryforwards includes $6
 
million (2021: $5
 
million) that relate to operating losses (of which $3
 
million relate to Canada, and $3
 
million relate to the Caribbean) that expire in various years commencing in 2022, and nil (2021: nil) that relate to U.S. capital losses.
(2)
Includes foreign currency translation adjustments.
Deferred tax assets and liabilities are assessed by entity for presentation in our consolidated balance sheet. As a result, the net deferred tax assets of $435 million (2021: $364 million) are presented in the consolidated balance sheet as deferred tax assets of $480 million (2021: $402 million) and deferred tax liabilities of $45 million (2021: $38 million).

Unrecognized tax losses
The amount of unused operating tax losses for which deferred tax assets have not been recognized was $1,620 million as at October 31, 2022 (2021: $1,611 million), of which $742 million (2021: $674 million) relates to the U.S. region and $878 million (2021: $937 million) relates to the Caribbean region. These unused operating tax losses expire within 10 years.
The amount of unused capital tax losses for which deferred tax assets have not been recognized was $610 million as at October 31, 2022 (2021: $519 million). These unused capital tax losses relate to
Canada and are subject to the outcome of the foreign exchange capital loss reassessment discussed below.
Enron
In prior years, the CRA issued reassessments disallowing the deduction of Enron settlement payments and related legal expenses (the Enron expenses). In January 2019, CIBC entered into a settlement agreement with the CRA with respect to the portion of the Enron expenses deductible in Canada. The portion of the Enron expenses deductible in the U.S. has not yet been agreed to by the Internal Revenue Service. It is possible that adjustments may be required to the amount of tax benefits recognized in the U.S.
Dividend received deduction
The CRA has reassessed CIBC approximately $1,602
million of additional income tax related to the denial of the tax deductibility of certain 2011 to 2017 Canadian corporate dividends, on the basis that certain dividends received were part of a “dividend rental arrangement”, and similar matters. This includes approximately $182
million of additional income tax for the 2017 taxation year that was reassessed by the CRA in May 2022. The dividends that were subject to the reassessments are similar to those prospectively addressed by the rules in the 2015 and 2018 Canadian federal budgets. It is possible that subsequent years may be reassessed for similar matters. In August 2021, CIBC filed a Notice of Appeal with the Tax Court of Canada and the matter is now in litigation. CIBC is confident that its tax filing positions were appropriate and intends to defend itself vigorously. Accordingly, no amounts have been accrued in the consolidated financial statements.
Foreign exchange capital loss reassessment
In November 2021, the Tax Court of Canada ruled against CIBC on its 2007 foreign exchange capital loss reassessment (Decision). CIBC disagrees with the Decision and filed its Appeal in November 2021. The Appeal is scheduled to be heard in December 2022. CIBC remains confident that its tax filing position was appropriate. Accordingly, no amounts have been accrued in the
 
consolidated financial statements. The exposure of
 
additional tax and interest related to this and similar matters is approximately
$300 million in addition to the potential inability to utilize approximately $600 million in unrecognized capital tax loss carryforwards.



Canadian federal budget
Following the announcement of budget proposals in April 2022, the Canadian Federal government released draft legislation
in
August 2022, and subsequently introduced other draft legislation which went through first and second readings in Parliament
in
November 2022. These proposals included the introduction of a one-time
 15%
Canada Recovery Dividend tax (CRD) on banks and life insurer groups, based on the average of 2020 and 2021 taxable income in excess o
f $1.0
 
billion. Once substantively enacted the CRD would become payable in the 2023 taxation year over a
five-year 
period in equal increments. The draft legislation also includes a prospective
 1.5%
increase in the tax rate applied to taxable income in excess of
 $100
 
million earned by banks and life insurers. We will account for these measures in future periods once they become substantively enacted, which is generally interpreted to occur at the point of a third reading in a Canadian Parliament held by a minority government.