Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

Components of income tax expense are as follows (in millions):


	Year Ended December 31,
	2020		2019		2018
Current income tax expense:
State income tax	$	—	$	3	$	3
Canadian federal and provincial income tax	51		109		63
Total current income tax expense	$	51	$	112	$	66

Deferred income tax expense/(benefit):
Canadian federal and provincial income tax	$	(70)	$	(46)	$	132
Total deferred income tax expense/(benefit)	$	(70)	$	(46)	$	132
Total income tax expense/(benefit)	$	(19)	$	66	$	198

Summary of differences between tax expense based on the statutory federal income tax rate and the effective income tax expense

The difference between income tax expense based on the statutory federal income tax rate and our effective income tax expense is summarized as follows (in millions):


	Year Ended December 31,
	2020		2019		2018
Income/(loss) before tax	$	(2,599)	$	2,246	$	2,414
Partnership (earnings)/loss not subject to current Canadian tax	2,221		(1,769)		(1,690)
	$	(378)	$	477	$	724
Canadian federal and provincial corporate tax rate	24%		26%		27%
Income tax expense/(benefit) at statutory rate	$	(91)	$	124	$	195


Canadian permanent differences and rate changes	$	72	$	(61)	$	—
State income tax	—		3		3
Total income tax expense/(benefit)	$	(19)	$	66	$	198

Deferred tax assets and liabilities

Deferred tax assets and liabilities are aggregated by the applicable tax paying entity and jurisdiction and result from the following (in millions):


	December 31,
	2020		2019
Deferred tax assets:
Derivative instruments	$	45	$	—
Lease liabilities	39		55
Net operating losses	2		2
Other	16		16
Total deferred tax assets	102		73

Deferred tax liabilities:
Property and equipment in excess of tax values	(475)		(472)
Derivative instruments	—		(22)
Lease assets	(38)		(53)
Other	(3)		(5)
Total deferred tax liabilities	(516)		(552)
Net deferred tax liabilities	$	(414)	$	(479)

Balance sheet classification of deferred tax assets/(liabilities):
Other long-term assets, net	$	2	$	2
Other long-term liabilities and deferred credits	(416)		(481)
	$	(414)	$	(479)