Income Taxes

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

18. INCOME TAXES

The components of the provision for (recovery of) income tax for the years ended December 31, 2022, 2021 and 2020 are as follows:

	2022
	Current			Deferred			Total
US Federal	$	—		$	14,650		$	14,650
US State		72			(2,085	)		(2,013	)
Canadian		(5,222	)		(2,734	)		(7,956	)
	$	(5,150	)	$	9,831		$	4,681

	2021
	Current			Deferred			Total
US Federal	$	—		$	(3,278	)	$	(3,278	)
US State		135			(176	)		(41	)
Canadian		(795	)		588			(207	)
	$	(660	)	$	(2,866	)	$	(3,526	)

	2020
	Current		Deferred			Total
US Federal	$	—	$	(4,879	)	$	(4,879	)
US State		260		(434	)		(174	)
Canadian		3,412		(1,149	)		2,263
	$	3,672	$	(6,462	)	$	(2,790	)

The (recovery of) provision for income taxes reflected in the consolidated statements of (loss) income for the years ended December 31, 2022, 2021 and 2020 differs from the amounts computed at the federal statutory tax rates. The principal

differences between the statutory income tax (recovery) and the effective provision for (recovery of) income taxes are summarized as follows:

	Year Ended December 31,
	2022			2021			2020
(Loss) income before income taxes	$	(96,734	)	$	(12,651	)	$	8,818
Tax (recovery) calculated at US domestic tax rates		(20,339	)		(2,592	)		1,869
State tax adjustments		(1,799	)		(230	)		(310	)
Non-deductible items		928			1,516			(6,531	)
True up of prior year income tax estimates		—			(648	)		(181	)
Share of income from joint venture		—			—			(228	)
Deferred adjustment		(3,324	)		(2,429	)		343
Tax rate differences on deferred items		308			397			49
Foreign rate differentials		88			86			1,643
Change in tax rates		5			5			37
Change in valuation allowance		28,684			57			3
Other		130			312			516
Recovery of income taxes	$	4,681		$	(3,526	)	$	(2,790	)

The statutory tax rate in effect in Canada and the United States for the year ended December 31, 2022, 2021 and 2020 was 27.0% and 21.0%, respectively.

The blended effective tax rate for 2022 was (4.8%) compared to 27.9% and (31.4%) in 2021 and 2020, respectively.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

The deferred tax assets and liabilities presented on the consolidated statements of financial position are net amounts corresponding to their reporting jurisdiction. The deferred tax assets and liabilities presented in the note disclosure are grouped based on asset and liability classification without consideration of their corresponding reporting jurisdiction.

Significant components of the Company’s net deferred income taxes at December 31, 2022 and 2021 are as follows:

	2022			2021
Deferred tax assets:
Other assets	$	5,536		$	5,140
Long-term debt		943			832
Tax losses: Non-capital and farm losses		33,579			22,860
Provisions: Debt and unit issuance costs		1,683			2,194
Tax losses: Valuation allowance		(30,419	)		(1,708	)
		11,322			29,318
Deferred tax liabilities:
Joint venture shares		(2,406	)		(2,662	)
Cash adjustment		(12,861	)		(11,514	)
Property, plant and equipment		(11,610	)		(17,033	)
		(26,877	)		(31,209	)
Net tax assets	$	(15,555	)	$	(1,891	)

In assessing the ability to realize deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based upon available positive and negative evidence and future taxable income, the Company has

recorded a $30,419 valuation allowance on its deferred tax assets for the year ended December 31, 2022. The valuation allowance reflected on the consolidated balance sheet is $1,708 at December 31, 2021.

Included in the schedule of deferred tax assets and liabilities above are US federal net operating loss carryforwards of approximately $106,428 and $74,607 as of December 31, 2022 and 2021, respectively, which will begin to expire in 2031. At the state level, the Company has a combined state net operating loss carry forwards of approximately $42,768 and $28,189 as of December 31, 2022 and 2021, respectively, which started to expire in 2022. The Canadian Federal Non-Capital Loss carry forwards are $43,829 and $26,916 as of December 31, 2022 and 2021, respectively. The Canadian Provincial Non-Capital Loss carry forwards are $15,974 and $13,409, as of December 31, 2022 and 2021, respectively.

At December 31, 2022 and 2021, the balance of uncertain tax benefits is zero. The Company does not anticipate that the amount of the uncertain tax benefit will significantly increase within the next 12 months. The Company recognizes accrued interest related to uncertain tax benefits and penalties as income tax expense. As of December 31, 2022 and 2021, there are no recognized liabilities for interest or penalties.

The Company is subject to taxation in the U.S. and various states, as well as Canada and its provinces. As of December 31, 2022, the Company’s tax years for 2019, 2020 and 2021 are subject to examination by the tax authorities. With few exceptions, as of December 31, 2022, the Company is no longer subject to U.S. federal, state or local examinations by tax authorities for years before 2019.