14. Income Taxes

Income tax expense

The Company or its subsidiaries operate in the United States, Canada, Barbados and India and the Company is subject to taxation in each of these jurisdictions. The income tax expense (benefit) reported differs from the amount computed by applying the United States statutory rate to income (loss) before income taxes for the following items:

	Year ended Dec 31, 2011			Year ended Dec 31, 2010			Year ended Dec 31, 2009			Period from Inception, Aug 21, 2002 to Dec 31, 2011
	$			$			$			$

Net loss before tax		(12,566,182	)		(18,682,124	)		(4,424,246	)		(56,944,729	)
US statutory tax rate		34.0%			34.0%			35.0%
Expected income tax benefit		(4,272,502	)		(6,351,922	)		(1,548,486	)		(19,619,155	)
Excess of US statutory tax rate over foreign tax rate		2,635,299			4,834,656			244,407			11,622,095
Non-deductible expenditures		233,786			577,343			496,471			3,536,297
Expiry of capital losses		--			--			--			2,061,731
Expiry of non-capital losses		--			--			--			2,175,950
Acquisition and utilization of losses		--			--			--			(4,467,769	)
Tax rate differential		2,863			368,262			150,479			55,772
Other		6,619			10,203			(11,346	)		236,111
		(1,393,935	)		(561,458	)		(668,475	)		(4,398,968	)
Valuation allowance		1,435,594			667,958			668,475			4,547,127
Total income tax expense		41,659			106,500			--			148,159

The Company recognizes interest and penalties related to unrecognized tax benefits within the provision for income taxes on continuing tax benefits. There are no unrecognized tax benefits that if recognized would affect the tax rate. The Company or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction, state jurisdictions and other foreign jurisdictions.

The Company is no longer subject to US federal or non-US income tax examinations for years before 2007. There are no income tax examinations currently in process.

Deferred income taxes

The Company provides for deferred taxes on temporary differences between the financial statements and tax basis of assets using the enacted tax rates that are expected to apply to taxable income when the temporary differences are expected to reverse. Significant components of the Company's deferred tax assets and liabilities that result from loss carry forwards and temporary differences between the financial statement basis and tax basis of assets and liabilities are summarized as follows:

	Year ended Dec 31, 2011 $			Year ended Dec 31, 2010 $

Difference between tax base and reported amounts of property and equipment		664,441			465,118
Non-capital loss carry forwards		3,840,215			2,585,415
		4,504,656			3,050,533
Valuation allowance		(4,547,127	)		(3,111,533	)
Deferred income tax asset/(liability)		(42,471	)		(61,000	)

To date, the Company has incurred operating losses since inception. This general pattern does not allow the Company to project sufficient sources of future taxable income to offset our net deferred tax assets. Under these current circumstances, it is management's opinion that the realization of these tax attributes does not reach the “more likely than not” criteria, and as a result, a valuation allowance has been recorded to off-set the net deferred tax asset at December 31, 2011.

Loss carry forwards

At December 31, 2011, the Company has non-capital loss carry forwards to reduce taxable income for income tax purposes in the various jurisdictions as outlined below which have not been reflected in these consolidated financial statements:

Tax Jurisdiction	Amount $		Expiry Dates Commence (year)
United States		10,316,000		2023
Canada		401,000		2026
Barbados		5,031,000		2013
Israel		427,000		--
		16,175,000

At December 31, 2011, there are no capital losses to carry forward.