Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

Income Taxes

Schedule of income tax expense (recovery)

($ millions)	2022	2021
Current:
Current year	4 333	1 353
Adjustments in respect of current income tax of prior years	(104)	42
Deferred:
Origination and reversal of temporary differences	(1 063)	29
Adjustments in respect of deferred income tax of prior years	54	23
Changes in tax rates and legislation	(27)	8
Movement in unrecognized deferred income tax assets	46	(4)
Total income tax expense	3 239	1 451

Reconciliation of Effective Tax Rate

($ millions)	2022	2021
Earnings before income tax	12 316	5 570
Canadian statutory tax rate	24.16%	24.24%
Statutory tax	2 976	1 350
Add (deduct) the tax effect of:
Non-taxable component of capital losses (gains)	67	(12)
Share-based compensation and other permanent items	-	3
Assessments and adjustments	(49)	65
Impact of income tax rates and legislative changes(1)	(84)	8
Non-taxable component of dispositions	(25)	(66)
Foreign tax rate differential(2)	290	111
Movement in unrecognized deferred income tax assets	46	(4)
Other	18	(4)
Total income tax expense	3 239	1 451
Effective tax rate	26.3%	26.1%

(1) The twelve months ended December 31, 2022 includes a current income tax recovery of $39 million related to the sale of the company’s wind and solar assets (note 33).

(2) The twelve months ended December 31, 2022 includes a deferred income tax recovery of $171 million related to the sale of the company’s UK assets (note 33)

Schedule of deferred income tax balances

	Deferred Income Tax Expense (Recovery)		Deferred Income Tax Liability (Asset)
			December 31	December 31
($ millions)	2022	2021	2022	2021
Property, plant and equipment	(729)	(260)	11 093	11 477
Decommissioning and restoration provision	(10)	141	(2 292)	(1 936)
Employee retirement benefit plans	(92)	(142)	(297)	(470)
Tax loss carry-forwards	(14)	161	(29)	(15)
Other	(145)	156	(111)	25
Net deferred income tax (recovery) / expense and liability	(990)	56	8 364	9 081

Summary of changes in deferred income tax balances

($ millions)	2022	2021
Net deferred income tax liability, beginning of year	9 081	8 758
Recognized in deferred income tax (recovery) / expense	(990)	56
Recognized in other comprehensive income	264	277
Foreign exchange, acquisition and other	9	(10)
Net deferred income tax liability, end of year	8 364	9 081

Schedule of deferred tax in shareholders' equity

($ millions)	2022	2021
Deferred Tax in Other Comprehensive Income
Actuarial gain on employment retirement benefit plans	264	277
Total income tax expense reported in equity	264	277