INCOME TAXES

12 Months Ended

Dec. 31, 2021

INCOME TAXES

INCOME TAXES

17.    INCOME TAXES

The relationship between the expected tax expense based on the combined federal and provincial income tax rate in Canada and the reported tax expense in the consolidated statement of comprehensive income can be reconciled as follows:

	For the years ended
	December 31,
	2021			2020			2019
Loss before income taxes	$	(24,802,377)		$	(29,219,098)		$	(35,102,222)
Statutory tax rate		27.00	%		27.00	%		27.00	%
Recovery of income taxes based on the combined Canadian federal and provincial statutory rates		(6,696,642)			(7,889,156)			(9,477,600)
Share-based remuneration		1,427,170			1,324,569			861,248
Unrealized gain on derivatives		(4,210,616)			(2,320,685)			—
Other permanent differences		1,461,840			(250,111)			190,097
Unrecognized deferred tax benefits		7,458,431			8,061,195			8,464,437
Difference in tax rates between foreign jurisdictions and Canada		646,509			550,131			(9,389)
Income tax (recovery)/ expense	$	86,692		$	(524,057)		$	28,793

The significant increase in other permanent differences is due to the amortization of deferred loss on the 2020 and 2021 Financings.

The components of income tax expense are shown in the following table:

	For the years ended
	December 31,
	2021		2020		2019
Current tax	$	86,692	$	(524,057)	$	28,793
Deferred tax		—		—		—
Income tax expense	$	86,692	$	(524,057)	$	28,793

17.    INCOME TAXES (continued)

Recognized deferred tax assets and liabilities consist of the following:

	For the years ended
	December 31,
	2021		2020		2019
Investment tax credits	$	464,888	$	464,888	$	464,888
Capital assets		3,376		4,287		7,392
Lease liability		123,211		224,249		194,528
Recognized deferred tax assets	$	591,475	$	693,424	$	666,808
Set off of tax		(591,475)		(693,424)		(666,808)
Investment tax credits	$	(464,888)	$	(464,888)	$	(464,888)
Capital assets		(3,376)		(4,287)		(7,392)
Right of use asset		(123,211)		(224,249)		(194,528)
Recognized deferred tax liabilities	$	(591,475)	$	(693,424)	$	(666,808)
Set off of tax	$	591,475	$	693,424	$	666,808

The Company recognizes tax benefits on losses or other deductible amounts where the probable criteria for recognition of the deferred tax assets has been met. The Company’s unrecognized deductible temporary differences and unused tax losses for which no deferred tax asst is recognized consist of the following amounts:

	For the years ended December 31,
	2021		2020		2019
Deductible temporary differences	$	17,281,466	$	10,616,227	$	7,843,252
Unused tax credits		2,416,825		2,416,825		2,416,825
Tax losses		342,742,914		318,477,703		273,792,687
	$	362,441,205	$	331,510,755	$	284,052,764

Unused tax losses for the Company and their expiry dates are as follows: There also losses in Israel and the US which are not subject to expiration.

Expiration Date	Amount
2023		6,038,836
2024		6,906,649
2025		18,105,259
2026		32,396,580
2027		135,245,992
2028		33,339,203
2029		15,799,773
2030		22,792,671
2031		14,421,890
US losses	$	18,232,480
Israel losses	$	39,463,581
	$	342,742,914