INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2020

INCOME TAXES

Income Tax (Recovery) Expense

($ millions)		2020		2019
Current:
	Current year	(650	)	1 524
	Adjustments to current income tax of prior years	(9	)	28
Deferred:
	Origination and reversal of temporary differences	(973	)	(819	)
	Adjustments in respect of deferred income tax of prior years	(52	)	83
	Changes in tax rates and legislation	(106	)	(1 124	)
	Movement in unrecognized deferred income tax assets	12		(58	)
Total income tax recovery		(1 778	)	(366	)

Reconciliation of Effective Tax Rate

($ millions)		2020		2019
(Loss) earnings before income tax		(6 097	)	2 533
Canadian statutory tax rate		24.96%		26.74%
Statutory tax		(1 522	)	677
Add (deduct) the tax effect of:
	Non-taxable component of capital gains	(45	)	(146)
	Share-based compensation and other permanent items	7		25
	Assessments and adjustments	(58	)	112
	Impact of income tax rates and legislative changes(1)	(173	)	(1 067)
	Foreign tax rate differential	3		83
	Movement in unrecognized deferred income tax assets	12		(58)
	Other	(2	)	8
Total income tax recovery		(1 778	)	(366)
Effective tax rate		29.2%		(14.4)%

(1) In the second quarter of 2019, the company recognized a deferred income tax recovery of $1.116 billion associated with the Government of Alberta's substantive enactment of legislation for the staged reduction of the corporate income tax rate from 12% to 8%. The deferred income tax recovery of $1.116 billion was comprised of $910 million recovery in the Oil Sands segment, $88 million recovery in the Refining and Marketing segment, $70 million recovery in the Exploration and Production segment, and $48 million recovery in the Corporate and Eliminations segment.

Deferred Income Tax Balances

	Deferred Income Tax (Recovery) Expense				Deferred Income Tax Liability (Asset)
($ millions)	2020		2019		December 31 2020		December 31 2019
Property, plant and equipment	(1 084	)	(2 348	)	11 963		12 814
Decommissioning and restoration provision	21		259		(2 304	)	(2 092	)
Employee retirement benefit plans	34		32		(605	)	(576	)
Tax loss carry-forwards	(20	)	16		(176	)	(156	)
Other	(70	)	123		(120	)	(23	)
Net deferred income tax recovery and liability	(1 119	)	(1 918	)	8 758		9 967

Change in Deferred Income Tax Balances

($ millions)	2020		2019
Net deferred income tax liability, beginning of year	9 967		11 917
Recognized in deferred income tax recovery	(1 119	)	(1 918	)
Recognized in other comprehensive income	(62	)	(23	)
Foreign exchange, acquisition and other	(28	)	(9	)
Net deferred income tax liability, end of year	8 758		9 967

Deferred Tax in Shareholders' Equity

($ millions)		2020		2019
Deferred Tax in Other Comprehensive Income
	Actuarial loss on employment retirement benefit plans	(62	)	(23	)
Total income tax recovery reported in equity		(62	)	(23	)