Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

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


	Year Ended December 31,
	2021		2020		2019
Current income tax expense:
State income tax	$	2	$	—	$	3
Canadian federal and provincial income tax	48		51		109
Total current income tax expense	$	50	$	51	$	112

Deferred income tax expense/(benefit):
Canadian federal and provincial income tax	$	23	$	(70)	$	(46)
Total deferred income tax expense/(benefit)	$	23	$	(70)	$	(46)
Total income tax expense/(benefit)	$	73	$	(19)	$	66

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,
	2021		2020		2019
Income/(loss) before tax	$	721	$	(2,599)	$	2,246
Partnership (earnings)/loss not subject to current Canadian tax	(370)		2,221		(1,769)
	$	351	$	(378)	$	477
Canadian federal and provincial corporate tax rate	24%		24%		26%
Income tax expense/(benefit) at statutory rate	$	84	$	(91)	$	124


Canadian permanent differences and rate changes	$	(13)	$	72	$	(61)
State income tax	2		—		3
Total income tax expense/(benefit)	$	73	$	(19)	$	66

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,
	2021		2020
Deferred tax assets:
Derivative instruments	$	39	$	45
Lease liabilities	48		39
Net operating losses	2		2
Other	17		16
Total deferred tax assets	106		102

Deferred tax liabilities:
Property and equipment in excess of tax values	(531)		(475)

Lease assets	(47)		(38)
Other	(3)		(3)
Total deferred tax liabilities	(581)		(516)
Net deferred tax liabilities	$	(475)	$	(414)

Balance sheet classification of deferred tax assets/(liabilities):
Other long-term assets, net	$	2	$	2
Other long-term liabilities and deferred credits	(477)		(416)
	$	(475)	$	(414)