Income and other taxes

12 Months Ended

Dec. 31, 2025

Income and other taxes:

a) Income tax (expense) recovery:


For the years ended December 31	2025		2024
Current tax (expense) recovery:
Current period before undernoted items	$	(80,062)	$	(74,169)

Adjustments to prior years including resolution for certain outstanding audits	63,132		43
	(16,930)		(74,126)
Deferred tax recovery (expense):
Origination and reversal of temporary differences	(39,821)		52,396
Adjustments to prior years including resolution for certain outstanding audits	(5,679)		(383)
Changes in tax rates	1,997		34
Impact of foreign exchange and other	1,988		(7,762)
	(41,515)		44,285
Total income tax expense	$	(58,445)	$	(29,841)

b) Reconciliation of the effective tax rate:

The Company operates in several tax jurisdictions and therefore its income is subject to various rates of taxation. Income tax expense differs from the amounts that would be obtained by applying the Canadian statutory income tax rate to net income before income taxes as follows:


For the years ended December 31	2025			2024
Income before income taxes	$	203,239		$	280,086


Canadian statutory tax rate	23.8		%	24.5		%
Income tax expense calculated at Canadian statutory tax rate	(48,371)			(68,621)
Decrease (increase) in income tax expense resulting from:
Impact of profit (loss) of equity-accounted investees reported net of tax	(3,575)			9,392
Impact of income and losses taxed in foreign jurisdictions	13,178			14,268
Utilization of (valuation allowance taken against) unrecognized loss carryforwards and temporary differences	(81,527)			6,482
Impact of tax rate changes	1,997			34
Impact of foreign exchange	3,699			1,650
Other business taxes	(4,294)			2,791
Impact of items not taxable for tax purposes	2,929			4,555
Adjustments to prior years including resolution for certain outstanding audits	57,453			(340)
Other	66			(52)
Total income tax expense	$	(58,445)		$	(29,841)

c) Net deferred income tax assets and liabilities:

(i) The tax effect of temporary differences that give rise to deferred income tax liabilities and deferred income tax assets is as follows:


As at			Dec 31, 2025						Dec 31, 2024
	Net		Deferred tax assets		Deferred tax liabilities		Net		Deferred tax assets		Deferred tax liabilities
Property, plant and equipment (owned)	$	(695,218)	$	11,108	$	(706,326)	$	(325,338)	$	(162,036)	$	(163,302)
Right-of-use assets	(37,921)		(10,116)		(27,805)		(35,757)		(25,816)		(9,941)
Repatriation taxes	(115,972)		(32)		(115,940)		(119,281)		(30)		(119,251)
Investment basis differential	(102,119)		—		(102,119)		—		—		—
Other	(16,258)		(2,754)		(13,504)		(26,241)		(11,267)		(14,974)
	(967,488)		(1,794)		(965,694)		(506,617)		(199,149)		(307,468)
Non-capital loss carryforwards	551,931		3,374		548,557		357,670		346,150		11,520
Lease obligations	46,610		7,663		38,947		48,706		35,740		12,966
Share-based compensation	12,718		290		12,428		24,567		8,185		16,382
Other	48,068		5,736		42,332		40,652		13,165		27,487
	659,327		17,063		642,264		471,595		403,240		68,355
Net deferred income tax assets (liabilities)	$	(308,161)	$	15,269	$	(323,430)	$	(35,022)	$	204,091	$	(239,113)

As at December 31, 2025, deferred income tax assets have been recognized in respect of non-capital loss carryforwards generated in the United States. These loss carryforwards expire as follows:



For the year ended December 31, 2025	Gross amount		Tax effect
Expire
Losses generated in 2015 (expires 2035)	$	282,035	$	62,048
Losses generated in 2016 (expires 2036)	432,581		95,168
Losses generated in 2017 (expires 2037)	234,941		51,687
	949,557		208,903
No expiry
Losses generated in 2018	11,727		2,580
Losses generated in 2019	475,744		104,664
Losses generated in 2020	275,776		60,671
Losses generated in 2021	65,283		14,362
Losses generated in 2022	16,715		3,677
Losses generated in 2023	88,832		19,543
Losses generated in 2024	89,493		19,689
Losses generated in 2025	515,546		113,420
Total non-capital loss carryforwards	$	2,488,673	$	547,509

Losses generated in the United States on or after January 1, 2018 may be carried forward indefinitely against future taxable income subject to the 80% deduction limitation. Tax losses generated before December 31, 2017 may be carried forward for a 20 year period. As at December 31, 2025 the Company had $237 million (2024 - $170 million) of deductible temporary differences in the United States that have not been recognized.

As at December 31, 2025, deferred income tax assets that have been recognized in respect of non-capital loss carryforwards in other tax jurisdictions are as below:


	2025				2024
	Non-capital Loss Carried Forward		Deferred tax Assets		Non-capital Loss Carried Forward		Deferred tax Assets

Canada	$	4,282	$	1,049	$	47,022	$	11,520
Netherlands	$	12,815	$	3,306	$	—	$	—
New Zealand	$	—	$	—	$	35,912	$	10,055
Trinidad	$	—	$	—	$	107,413	$	37,594
Total	$	17,097	$	4,355	$	190,347	$	59,169

The losses in Canada were generated in 2020 and can be carried forward 20 years against future taxable income. Losses in the Netherlands can be carried forward indefinitely against future taxable income.

(ii) Analysis of the change in deferred income tax assets and liabilities:


			2025						2024
	Net		Deferred tax assets		Deferred tax liabilities		Net		Deferred tax assets		Deferred tax liabilities
Balance, January 1	$	(35,022)	$	204,091	$	(239,113)	$	(65,590)	$	152,250	$	(217,840)


Deferred income tax recovery (expense) included in net income	(41,515)		43,930		(85,445)		44,285		65,244		(20,959)
Deferred income tax recovery (expense) included in other comprehensive income	5,750		(3,208)		8,958		(14,096)		(13,403)		(693)
Deferred income tax acquired / generated from OCI acquisition	(236,882)		(229,544)		(7,338)		—		—		—
Other	(492)		—		(492)		379		—		379
Balance, December 31	$	(308,161)	$	15,269	$	(323,430)	$	(35,022)	$	204,091	$	(239,113)

International Tax Reform — Pillar Two Rules

Pillar Two rules were published by the Organization for Economic Co-operation and Development and establish a global minimum fifteen percent top-up tax regime. Canada enacted legislation resulting in Pillar Two rules being effective for tax years beginning January 1, 2024. The Company is in scope of the legislation and has performed an assessment of the exposure to top-up taxes that apply based on our financial results in the jurisdictions in which we operate. For the year ended December 31, 2025, $3 million (2024 - $3 million) is included in current tax expense relating to Pillar Two top-up obligations.