NOTE 20: INCOME TAXES

12 Months Ended

Dec. 31, 2019

Note 17 Income Taxes

INCOME TAXES

a) Rate reconciliation

Income tax expense differs from the amount that would result by applying the combined Canadian federal and provincial income tax rates to earnings before income taxes. The reconciliation of the combined Canadian federal and provincial statutory income tax rate of 27% (2018 - 27%, 2017 – 26%) to the effective tax rate is as follows:

	Years ended December 31,
	2019			2018			2017
Loss before taxes	$	(4,301,663	)	$	(3,789,918	)	$	(3,109,921	)
Combined Canadian federal and provincial income tax rates		27	%		27	%		26	%
Expected income tax recovery		(1,161,450	)		(1,023,280	)		(808,580	)
Items that cause an increase (decrease):
Effect of different tax rates in foreign jurisdiction		82,490			35,690			(219,020	)
Non-deductible expenses less other permanent differences		(367,360	)		294,780			10,990
Tax rate changes		8,700			152,650			233,990
Change in prior year estimates		(413,020	)		—			165,540
Share issuance costs and other		(36,010	)		1,690			(560	)
Change in tax benefits not recognized		1,886,650			538,470			617,640
Income tax recovery	$	—		$	—		$	—

b) Unrecognized deferred tax assets and liabilities

Deferred taxes are provided as a result of temporary differences that arise due to the differences between the income tax values and the carrying amount of assets and liabilities. Deferred tax assets have not been recognized in respect of the following deductible temporary differences:

	As at December 31,
	2019		2018
Deferred tax assets:
Non-capital losses	$	11,870,240	$	7,291,370
Property and equipment		31,080		59,640
Intangible assets		485,390		366,070
Right of use assets net of lease liability		25,060		—
Accrued fees and compensation		264,360		57,380
Share issue costs		340,880		179,640
Capital losses carried forward		5,420		5,420
Unrealized foreign exchange loss		1,880		1,880
Goodwill		2,266,520		—
Deferred tax assets, net	$	15,290,830	$	7,961,400

c) Expiration of income tax loss carry forwards

As at December 31, 2019, the Company has $6,158,650 of Canadian non-capital income tax losses (unrecognized) which will expire over 2035 through 2039, and $5,711,590 of United States net operating losses (unrecognized) of which $2,688,420 will expire over 2035 through 2037, and $3,023,170 which are indefinite.