INCOME TAX

12 Months Ended

Mar. 31, 2022

Major items causing the Company’s income tax rate to differ from the Canadian statutory rate of approximately 26.50% are as follows:


	Year ended March 31,
	2022	2021
Net loss and comprehensive loss before income taxes	67,631	32,220

Expected recovery at statutory rate	17,922	8,538
Share-based compensation	(4,778)	(3,099)
Share issuance costs	794	1,324
Difference between Canadian and foreign tax rates	(1,414)	(97)
Non-deductible expenses	(1,242)	(40)
Change in unrecognized deferred tax assets	(11,282)	(6,626)
Income tax recovery	—	—

The significant components of the Company’s deferred tax assets, resulting from temporary differences, unused tax credits and unused tax losses, that have not been included on the consolidated statements of financial position, are as follows:


As at	March 31, 2022	March 31, 2021
Non-capital loss carryforwards	16,307	5,660
Share issuance costs	1,526	1,126
Depreciation/CCA differences	227	12
Other	43	23
	18,103	6,821
Valuation allowance	(18,103)	(6,821)
	—	—

These deferred tax assets have not been recognized because it is not probable that future taxable profit will be available against which the Company will be able to use these potential benefits.

Non-capital loss balance

As at March 31, 2022, the Company has non-capital losses in Canada, which under certain circumstances can be used to reduce the taxable income of future years. The non-capital losses expire as follows:


Year of expiry			$
2040			740
2041			19,193
2042			30,112
			50,045

As at March 31, 2022, the Company has non-capital losses in the United States, which under certain circumstances can be used to reduce the taxable income of future years. The non-capital losses, stated in Canadian dollars, that will expire as follows:


Year of expiry			$
2041 - Pre-acquisition loss generated up to December 4, 2020			933
2041 - Loss generated in the period from December 4, 2020 to March 31, 2021			1,241
2042 - Loss generated in the year ended March 31, 2022			6,722
			8,896

Although the US federal losses carryforward indefinitely, they are subject to restrictions on their deductibility. The deductibility of the pre-acquisition loss and the post-acquisition loss is restricted to 80% of taxable income in the year of deduction. The pre-acquisition loss is further restricted to an annual limitation under Section 382. As at March 31, 2022, the annual limitation was $136.

Massachusetts allows for a 20-year carryforward period for restricted and unrestricted losses without limitation.

As at March 31, 2022, the Company has non-capital losses in Ireland, which under certain circumstances can be used to reduce the taxable income of future years. The non-capital losses, stated in Canadian dollars, expire as follows:


Year of expiry			$
2042			9,469
			9,469