Income Taxes (Tables)

12 Months Ended

Dec. 31, 2024

Income tax expense


In millions	Year ended December 31,	2024			2023			2022
Canadian statutory federal tax rate		15		%	15		%	15		%
Income tax expense at the Canadian statutory federal tax rate		$	878		$	973		$	1,014
Income tax expense resulting from:
Provincial and foreign income taxes (1)		582			633			657
Tax-deductible goodwill and related impacts (2)		—			(713)			—
Other (3)		(56)			(30)			(26)
Income tax expense		$	1,404		$	863		$	1,645
Net cash payments for income taxes		$	1,221		$	1,197		$	1,288

(1) Includes the impact of Canadian provincial taxes, U.S. federal and state taxes, and other foreign taxes.

(2) Relates to the impacts of recognizing the $767 million deferred income tax recovery party offset by a $54 million income tax expense on the foregone tax deductions related to prior taxation years.

(3) Includes adjustments relating to the filing or resolution of matters pertaining to prior years' income taxes, including net recognized tax benefits, excess tax benefits resulting from the settlement of equity settled awards under the Company's stock-based compensation plans, and other items.

Tax information on a domestic and foreign basis


In millions	Year ended December 31,	2024		2023		2022
Income before income taxes
Domestic		$	4,540	$	4,936	$	4,835
Foreign		1,312		1,552		1,928
Total income before income taxes		$	5,852	$	6,488	$	6,763
Current income tax expense
Domestic		$	860	$	896	$	956
Foreign		219		255		285
Total current income tax expense		$	1,079	$	1,151	$	1,241
Deferred income tax expense (recovery)
Domestic		$	282	$	360	$	298
Foreign		43		(648)		106
Total deferred income tax expense (recovery)		$	325	$	(288)	$	404

Significant components of deferred income tax assets and liabilities

Net deferred income taxes


In millions	As at December 31,	2024		2023
Deferred income tax assets (liabilities)
Deferred income tax assets (1)		$	689	$	682
Deferred income tax liabilities		(10,874)		(10,066)
Net deferred income taxes		$	(10,185)	$	(9,384)

Deferred income tax assets
Tax-deductible goodwill (1)		$	689	$	682
Net operating losses and tax credit carryforwards (2)		235		130
Lease liabilities		131		126
Unrealized foreign exchange losses		124		—
Pension liability		92		95
Personal Injury & legal claims		61		59
Other postretirement benefits liability		37		38
Compensation reserves		34		37
Other		59		56
Total deferred income tax assets		$	1,462	$	1,223
Deferred income tax liabilities
Properties		$	(10,232)	$	(9,560)
Pension asset		(1,189)		(822)
Operating lease right-of-use assets		(121)		(106)

Other		(105)		(119)
Total deferred income tax liabilities		$	(11,647)	$	(10,607)
Net deferred income taxes		$	(10,185)	$	(9,384)
Net deferred income taxes by jurisdiction
Domestic		$	(6,405)	$	(5,950)
Foreign U.S.		(4,469)		(4,116)
Foreign non-U.S. (1)		689		682
Net deferred income taxes		$	(10,185)	$	(9,384)

(1)As at December 31, 2024, the Company had tax-deductible goodwill of $5.8 billion remaining to be amortized which will expire in 2030.

(2) As at December 31, 2024, the Company had net interest expense deduction carryforwards of $913 million which are available to offset future U.S. federal and state taxable income over an indefinite period. In addition, the Company had net operating loss carryforwards of $200 million for U.S. state tax purposes which are available to offset future U.S. state taxable income and are expiring between 2025 and 2044.

Reconciliation for unrecognized tax benefits for domestic and foreign tax positions

Unrecognized tax benefits


In millions	Year ended December 31,	2024		2023		2022
Gross unrecognized tax benefits at beginning of year		$	46	$	52	$	64
Increases for:
Tax positions related to the current year		4		4		3

Decrease for:
Tax positions related to prior years		(8)		(8)		(10)
Settlements		(1)		(2)		(5)


Gross unrecognized tax benefits at end of year		41		46		52
Adjustments to reflect tax treaties and other arrangements		(13)		(14)		(14)
Net unrecognized tax benefits at end of year		$	28	$	32	$	38