Income Tax

12 Months Ended

Dec. 31, 2018

Income Tax [Text Block]

16.	Income Taxes
	Income taxes reported differ from the amount computed by applying the statutory rates to net income (losses). The reasons are as follows:

		2018			2017
Statutory income taxes	$	(2,421	)	$	(794	)
Net operating losses for which no tax benefits have been recorded		1,185			346
Deficiency of depreciation over capital cost allowance		(236	)		(235	)
Non-deductible expenses		422			239
Undeducted research and development expenses		1,167			525
Investment tax credit		(117	)		(81	)
	$	-		$	-

The major components of the deferred tax assets classified by the source of temporary differences are as follows:

		2018			2017
Leasehold improvements and equipment	$	418		$	252
Net operating losses carryforward		4,170			2,620
Undeducted research and development expenses		2,774			2,054
Non-refundable tax credits carryforward		1,982			1,553
		9,344			6,479
Valuation allowance		(9,344	)		(6,479	)
	$	-		$	-

As at December 31, 2018, management determined that enough uncertainty existed relative to the realization of deferred income tax asset balances to warrant the application of a full valuation allowance. Although management believes that certain of the net operating losses will be applied against earnings in 2019, management continues to believe that enough uncertainty exists relative to the realization of the remaining deferred income tax asset balances such that no recognition of deferred income tax assets is warranted.

There were Canadian and provincial net operating losses of approximately $14,934 thousand (2017: $9,560 thousand) and $16,498 thousand (2017: $10,052 thousand) respectively, that may be applied against earnings of future years. Utilization of the net operating losses is subject to significant limitations imposed by the change in control provisions. Canadian and provincial losses will be expiring between 2027 and 2038. A portion of the net operating losses may expire before they can be utilized.

As at December 31, 2018, the Company had non-refundable tax credits of $1,981 thousand (2017: $1,553 thousand) of which $8 thousand is expiring in 2026, $9 thousand is expiring in 2027, $165 thousand is expiring in 2028, $145 thousand is expiring in 2029, $124 thousand is expiring in 2030, $131 thousand is expiring in 2031, $164 thousand is expiring in 2032, $109 thousand is expiring in 2033, $83 thousand expiring in 2034, $97 thousand is expiring in 2035, $135 thousand expiring in 2036, $257 thousand is expiring in 2037 and $554 thousand expiring in 2038 and undeducted research and development expenses of $10,663 thousand (2017: $7,532 thousand) with no expiration date.

The deferred tax benefit of these items was not recognized in the accounts as it has been fully provided for.

Unrecognized Tax Benefits

The Company does not have any unrecognized tax benefits.

Tax Years and Examination

The Company files tax returns in each jurisdiction in which it is registered to do business. For each jurisdiction a statute of limitations period exists. After a statute of limitations period expires, the respective tax authorities may no longer assess additional income tax for the expired period. Similarly, the Company is no longer eligible to file claims for refund for any tax that it may have overpaid. The following table summarizes the Company’s major tax jurisdictions and the tax years that remain subject to examination by these jurisdictions as of December 31, 2018:

Tax Jurisdictions	Tax Years
Federal - Canada	2014 and onward
Provincial - Quebec	2014 and onward
Federal - USA	2014 onward