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INCOME TAXES
12 Months Ended
Dec. 31, 2019
Income Taxes [Abstract]  
INCOME TAXES
INCOME TAXES
The movements of the components of the deferred tax assets and deferred tax liabilities are as follows:
($ millions)
Balance at December 31, 2018

Recognized in Earnings

Recognized in Other Comprehensive Income

Acquisition

Equity

Other

Balance at December 31, 2019

Deferred income tax assets
 
 
 
 
 
 
 
Derivative financial instruments
(18
)
5





(13
)
Employee benefits
9

(1
)
1




9

Share-based payments
26

(2
)




24

Provisions
156

29


20



205

Benefit of loss carryforwards
153

256


13


(22
)
400

Other deductible temporary differences
68

(39
)

2

(3
)

28

 
 
 
 
 
 
 
 
Deferred income tax liabilities
 
 
 
 
 
 
 
Property, plant and equipment
1,660

301


136


8

2,105

Intangible assets
118

(14
)

180



284

Investments in equity accounted investees
1,262

(155
)




1,107

Taxable limited partnership income deferral
122

(46
)




76

Other taxable temporary differences
6

(12
)



(7
)
(13
)
Total deferred tax liabilities
2,774

(174
)
(1
)
281

3

23

2,906

($ millions)
Balance at December 31, 2017

Recognized in Earnings

Recognized in Other Comprehensive Income

Acquisition

Equity

Other

Balance at December 31, 2018

Deferred income tax assets
 
 
 
 
 
 
 
Derivative financial instruments
11

(29
)




(18
)
Employee benefits
7


2




9

Share-based payments
21

5





26

Provisions
153

3





156

Benefit of loss carryforwards
180

(33
)

(7
)

13

153

Other deductible temporary differences
56

16



(4
)

68

 
 
 
 
 
 
 
 
Deferred income tax liabilities
 
 
 
 
 
 
 
Property, plant and equipment
1,361

299





1,660

Intangible assets
198

(80
)




118

Investments in equity accounted investees
1,173

89





1,262

Taxable limited partnership income deferral
56

66





122

Other taxable temporary differences
16

(18
)



8

6

Total deferred tax liabilities
2,376

394

(2
)
7

4

(5
)
2,774


Pembina's consolidated statutory tax rate for the year ended December 31, 2019 was 26.7 percent (2018: 27.0 percent).
Reconciliation of Effective Tax Rate
For the years ended December 31
 
 
($ millions, except as noted)
2019

2018

Earnings before income tax
1,528

1,742

Statutory tax rate
26.7
%
27.0
%
Income tax at statutory rate
408

470

Tax rate changes and foreign rate differential
(359
)
(16
)
Changes in estimate and other
(16
)
9

Permanent items
3

1

Income tax expense
36

464


In the second quarter of 2019, the enactment of Bill 3 Job Creation Tax Cut Act ("Alberta Corporate Tax Amendment") reduced the corporate income tax rate from 12 percent to eight percent over a four-year period which resulted in a deferred income tax recovery of $305 million.
Income Tax Expense
For the years ended December 31 
 
 
($ millions)
2019

2018

Current tax expense
210

70

Deferred tax expense




Origination and reversal of temporary differences
393

368

Tax rate changes on deferred tax balances
(345
)
(1
)
(Increase) decrease in tax loss carry forward
(222
)
27

Total deferred tax (recovery) expense
(174
)
394

Total income tax expense
36

464


Deferred Tax Items Recovered Directly in Equity
For the years ended December 31
 
 
($ millions)
2019

2018

Share issue costs
(3
)
(4
)
Other comprehensive income (loss)
1

2

Deferred tax items recovered directly in equity
(2
)
(2
)

Pembina has temporary differences associated with its investments in subsidiaries. At December 31, 2019, Pembina has not recorded a deferred tax asset or liability for these temporary differences (2018: nil) as Pembina controls the timing of the reversal and it is not probable that the temporary differences will reverse in the foreseeable future.
At December 31, 2019, Pembina had US$1.1 billion (2018: US$221 million) of U.S. tax losses that will expire after 2030 and $67 million (2018: $349 million) of Canadian tax losses that will expire after 2037. Pembina has determined that it is probable that future taxable profits will be sufficient to utilize these losses.