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INCOME TAXES

12 Months Ended

Dec. 31, 2020

13. INCOME TAXES

The effective income tax rates differ from the amount that would be computed by applying the combined federal and provincial statutory income tax rates to loss before income taxes. The reconciliation is as follows:


	Successor						Predecessor
	December 31,		December 31,		December 31,		May 31, 2018
	2020		2019		2018 (214 days)		(151 days)
Loss before income taxes	$	(1,355.8)	$	(609.2)	$	(432.7)	$	(191.6)
Income tax recovery at the combined basic federal and provincial tax rate (26.5% in 2020; 26.5% in 2019; and 26.5% in 2018)		(359.3)		(161.4)		(114.7)		(50.8)
Decrease (increase) resulting from:
Permanent differences		12.5		8.8		5.3		3.7
Variance between combined Canadian tax rate and the tax rate applicable to U.S. earnings		(1.3)		1.9		1.3		0.9
(Recognition) non-recognition of deferred tax assets		(11.1)		(6.5)		(1.6)		11.9
Other		(1.7)		(0.3)		(4.3)		7.3
Income tax recovery	$	(360.9)	$	(157.5)	$	(114.0)	$	(26.9)

Deferred income taxes

Deferred income taxes represent the net tax effect of non-capital tax losses and temporary differences between the consolidated financial statement carrying amounts and the tax basis of assets and liabilities. The changes in the periods in the components of the Company’s deferred tax assets and liabilities are as follows:

Balance,

Acquisitions

Recognized in

Balance,

December 31,

via business

Foreign

Recognized in

other

December

2019

combinations

exchange

equity

net loss

comprehensive loss

31, 2020

Deferred tax assets

Non-capital loss carry forwards

216.3

68.4

(1.5)

—

143.6

—

426.8

Landfill closures and post-closure obligations

55.0

64.2

(0.7)

—

61.4

—

179.9

Accrued liabilities

2.5

6.1

—

1.5

—

10.1

Other

50.8

—

(0.4)

22.3

33.3

—

106.0

324.6

138.7

(2.6)

22.3

239.8

—

722.8

Deferred tax liabilities

Property and equipment

383.4

212.1

(2.2)

—

77.9

—

671.2

Intangible assets

663.4

41.1

(4.2)

—

(84.6)

—

615.7

Cash flow hedges

14.9

—

(5.1)

9.8

Other

(3.3)

8.9

2.2

—

(115.7)

—

(107.9)

1,058.4

262.1

(4.2)

—

(122.4)

(5.1)

1,188.8

Net deferred income tax liabilities

733.8

123.4

(1.6)

(22.3)

(362.2)

(5.1)

466.0

Acquisitions via business combinations includes $2.7 million of measurement period adjustments to adjust previously reported purchase price allocations completed during prior years.

As at December 31, 2020, the Company had income tax losses of approximately $1,754.0 million ($908.2 million as at December 31, 2019) available to carry forward to reduce future years’ taxable income. If not utilized, these losses will begin to expire in 2024 and fully expire in 2040.


	Balance,		Acquisitions						Recognized in		Balance,
	December 31,		via business		Foreign		Recognized		other		December 31,
	2018		combinations ⁽¹⁾		exchange		in net loss		comprehensive loss		2019
Deferred tax assets
Non-capital loss carry forwards	$	142.1	$	(12.3)	$	(4.4)	$	90.9	$	—	$	216.3
Landfill closures and post-closure obligations		40.0		2.2		(1.3)		14.1		—		55.0
Accrued liabilities		5.4		(0.1)		(0.3)		(2.5)		—		2.5
Other		28.0		14.5		(2.0)		10.3		—		50.8
		215.5		4.3		(8.0)		112.8		—		324.6
Less: Non-recognition of deferred tax assets		(20.3)		—		(0.3)		20.6		—		—
		195.2		4.3		(8.3)		133.4		—		324.6
Deferred tax liabilities
Property and equipment		309.0		50.8		(11.8)		35.4		—		383.4
Intangible assets		664.5		81.0		(11.7)		(70.4)		—		663.4
Cash flow hedges		(7.5)		—		—		(0.1)		22.5		14.9
Other		(11.7)		—		0.5		7.9		—		(3.3)
		954.3		131.8		(23.0)		(27.2)		22.5		1,058.4
Net deferred income tax liabilities	$	759.1	$	127.5	$	(14.7)	$	(160.6)	$	22.5	$	733.8

(1)	Acquisitions via business combinations includes $46.8 million of measurement period adjustments to adjust previously reported purchase price allocations completed during 2018.