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Note 16 - Income Tax
 12 Months Ended
Dec. 31, 2016
Notes to Financial Statements  
Income Tax Disclosure [Text Block]
16.
Income tax
 
The following is a reconciliation stated as a percentage of pre-tax earnings of the Ontario, Canada combined statutory corporate income tax rate to the Company’s effective tax rate:
 
    2016   2015   2014
             
Combined statutory rate    
26.5
 %    
26.5
 %    
26.5
 %
Nondeductible expenses    
2.4
      
5.8
      
6.4
  
Tax effect of flow-through entities    
(1.1
 )    
(2.5
 )    
(2.9
 )
Impact of changes in foreign exchange rates    
-
      
(2.1
 )    
(0.8
 )
Adjustments to tax liabilities for prior periods    
(0.4
 )    
(1.4
 )    
(2.5
 )
Effects of changes in enacted tax rates    
-
      
(0.5
 )    
0.1
  
Changes in liability for unrecognized tax benefits    
(0.6
 )    
(0.6
 )    
(1.9
 )
Stock-based compensation    
0.5
      
13.9
      
4.1
  
Foreign, state, and provincial tax rate differential    
4.4
      
1.1
      
(6.2
 )
Other taxes    
1.4
      
2.4
      
2.4
  
Change in valuation allowance    
0.3
      
0.6
      
(1.7
 )
Outside basis difference in investments    
0.5
      
1.4
      
1.4
  
Other    
0.4
      
0.3
      
0.3
  
Effective income tax rate    
34.3
 %    
44.9
 %    
25.2
 %
 
Earnings before income tax by jurisdiction comprise the following:
 
    2016   2015   2014
             
Canada   $
23,309
     $
(31,818
 )   $
(11,751
 )
United States    
40,435
      
27,301
      
14,242
  
Foreign    
75,656
      
76,984
      
69,623
  
Total   $
139,400
     $
72,467
     $
72,114
  
 
The Canadian earnings before income tax for the year ended
December
31,
2015
includes stock-based compensation and transaction costs of
$49,465
related to the Spin-off.
 
Income tax expense (recovery) comprises the following:
 
    2016   2015   2014
             
Current                        
Canada   $
5,091
     $
(770
 )   $
(6,343
 )
United States    
2,090
      
1,555
      
(3,474
 )
Foreign    
30,650
      
29,014
      
28,901
  
     
37,831
      
29,799
      
19,084
  
                         
Deferred                        
Canada    
2,278
      
(875
 )    
(336
 )
United States    
12,753
      
5,980
      
2,728
  
Foreign    
(5,033
 )    
(2,352
 )    
(3,271
 )
     
9,998
      
2,753
      
(879
 )
                         
Total   $
47,829
     $
32,552
     $
18,205
  
 
The significant components of deferred income tax are as follows:
 
    2016   2015
         
Loss carry-forwards and other credits   $
56,822
     $
70,952
  
Expenses not currently deductible    
22,525
      
22,018
  
Stock-based compensation    
474
      
210
  
Investments    
17,303
      
15,470
  
Provision for doubtful accounts    
4,990
      
3,601
  
Financing fees    
376
      
267
  
Net unrealized foreign exchange    
(399
 )    
3,097
  
Depreciation and amortization    
(21,713
 )    
(18,932
 )
Less: valuation allowance    
(12,707
 )    
(15,603
 )
Net deferred income tax asset   $
67,671
     $
81,080
  
 
As at
December
31,
2016,
the Company believes that it is more likely than not that the net deferred tax assets of
$67,671
will be realized based upon future earnings, consideration of net operating loss (“NOL”) limitations, earnings trends and tax planning strategies. The amount of deferred tax assets considered realizable, however, could be reduced in the near term if estimates of future earnings are reduced.
 
The Company has gross NOL carry-forward balances as follows:
 
    Gross loss carry forward   Gross losses not recognized   Net
    2016   2015   2016   2015   2016   2015
                         
Canada   $
37,428
     $
49,924
     $
153
     $
141
     $
37,275
     $
49,783
  
United States    
85,550
      
118,224
      
4,100
      
4,100
      
81,450
      
114,124
  
Foreign    
45,988
      
41,333
      
31,543
      
31,902
      
14,445
      
9,431
  
 
The Company has gross capital loss carry-forwards as follows:
 
    Gross loss carry forward   Gross losses not recognized   Net
    2016   2015   2016   2015   2016   2015
                         
Canada   $
183
     $
369
     $
108
     $
369
     $
75
     $
-
  
United States    
54
      
-
      
-
      
-
      
54
      
-
  
Foreign    
6,521
      
6,489
      
6,521
      
6,489
      
-
      
-
  
 
These amounts above are available to reduce future federal, state, and provincial income taxes in their respective jurisdictions. NOL carry-forward balances attributable to Canada begin to expire in
2030.
NOL carry-forward balances attributable to the United States begin to expire in
2030.
Foreign NOL carry-forward balances begin to expire in
2018.
The utilization of NOLs
may
be subject to certain limitations under federal, provincial, state or foreign tax laws.
 
Cumulative unremitted foreign earnings of the US subsidiaries is nil
(2015
- nil). Cumulative unremitted foreign earnings of international subsidiaries of the Company approximated
$21,886
as at
December
31,
2016
(2015
-
$21,642).
The Company has not provided a deferred tax liability on the unremitted foreign earnings as it is management’s intent to permanently reinvest such earnings outside of Canada. In addition, any repatriation of such earnings would not be subject to significant Canadian or foreign taxes.
 
A reconciliation of the beginning and ending amounts of the liability for unrecognized tax benefits is as follows:
 
    2016   2015
         
Balance, January 1   $
2,519
     $
3,624
  
Gross increases for tax positions of current period    
111
      
174
  
Gross increases for tax positions of prior periods    
41
      
365
  
Amount recognized on acquisitions    
613
      
-
  
Reduction for settlements with taxing authorities    
-
      
(335
 )
Reduction for lapses in applicable statutes of limitations    
(1,031
 )    
(967
 )
Foreign currency translation    
39
      
(342
 )
                 
Balance, December 31   $
2,292
     $
2,519
  
 
Of the
$2,292
(2015
-
$2,519)
in gross unrecognized tax benefits,
$2,292
(2015
-
$2,519)
would affect the Company’s effective tax rate if recognized. For the year ended
December
31,
2016,
additional interest and penalties of
$234
related to uncertain tax positions were accrued
(2015
-
$174;
2014
-
106).
The Company reversed
$58
of accrued interest and penalties related to settled positions in
2016
(2015
-
$106;
2014
- nil). As at
December
31,
2016,
the Company had accrued
$350
(2015
-
$174)
for potential income tax related interest and penalties.
 
Within the next
twelve
months, the Company believes it is reasonably possible that
$581
of unrecognized tax benefits associated with uncertain tax positions
may
be reduced due to lapses in statutes of limitations.
 
The Company files tax returns in Canada, the United States and multiple foreign jurisdictions. The number of years with open tax audits varies depending on the tax jurisdiction. Generally, income tax returns filed with the Canada Revenue Agency and related provinces are open for
four
to
seven
years and income tax returns filed with the United States Internal Revenue Service and related states are open for
three
to
five
years. Tax returns in the significant foreign jurisdictions that the Company conducts business in are generally open for
four
years.
 
The Company does not currently expect any other material impact on earnings to result from the resolution of matters related to open taxation years, other than noted above. Actual settlements
may
differ from the amounts accrued. The Company has, as part of its analysis, made its current estimates based on facts and circumstances known to date and cannot predict changes in facts and circumstances that
may
affect its current estimates.