Income Taxes

3 Months Ended

Mar. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

11. Income Taxes

(a)Income Tax Expense

For the three months ended March 31, 2022, the Company recorded income tax expense of $2.6 million (2021 — $3.1 million). For the three months ended March 31, 2022, the Company’s effective tax rate differs from the combined Canadian federal and provincial statutory income tax rate due to the following factors:

	Three Months Ended					Three Months Ended
	March 31, 2022					March 31, 2021
(In thousands of U.S. Dollars, except rates)	Amount			Rate		Amount			Rate
Income tax benefit at combined statutory rates	$	2,475		26.5%		$	1,969		26.5%
Adjustments resulting from:
Increase in valuation allowance		(5,009	)	(53.6%)			(6,971	)	(93.8%)
(Shortfall) excess tax benefits related to share-based compensation		(129	)	(1.4%)			741		10.0%
Changes to tax reserves		(160	)	(1.7%)			557		7.5%
Gain on sale of Maoyan investment not taxable		—			—		1,367		18.4%
Withholding taxes resulting from management's decision to no longer indefinitely reinvest the historical earnings of certain foreign subsidiaries		—			—		(547	)	(7.4%)
Other non-deductible/non-taxable items		213		2.3%			(184	)	(2.5%)
Income tax expense	$	(2,610	)	(27.9%)		$	(3,068	)	(41.3%)

For the three months ended March 31, 2022, the Company recorded an additional $5.0 million (2021 — $7.0 million) valuation allowance against deferred tax assets in jurisdictions where management cannot reliably forecast that sufficient future tax liabilities will arise in specific jurisdictions, which includes the impact of the COVID-19 pandemic. Accordingly, the tax benefit associated with the current period losses in these jurisdictions is not ultimately reflected in the Company’s Condensed Consolidated Statements of Operations.

As of March 31, 2022, the Company’s Condensed Consolidated Balance Sheets include net deferred income tax assets of $13.9 million, net of a valuation allowance of $51.0 million (December 31, 2021 — $13.9 million, net of a valuation allowance of $46.0 million). The valuation allowance will be reversed when and if management determines it is more likely than not that the Company will incur sufficient tax liabilities to allow it to utilize the deferred tax assets against which the valuation allowance is recorded. Despite the valuation allowance recorded against its deferred tax assets, the Company remains entitled to benefit from tax attributes which currently have a valuation allowance applied to them.

(b)Income Tax Effect on Other Comprehensive Income (Loss)

For the three months ended March 31, 2022 and 2021, the Income Tax Expense related to the components of Other Comprehensive Income (Loss) is as follows:

	Three Months Ended
		March 31,
(In thousands of U.S. Dollars)		2022			2021
Unrealized change in cash flow hedging instruments		$	(82	)	$	(77	)
Realized change in cash flow hedging instruments			(8	)		60
Reclassification of unrealized change in ineffective cash flow hedging instruments			—			6
Defined benefit and postretirement benefit plans			(12	)		(13	)
		$	(102	)	$	(24	)