| Income Taxes |
18. Income taxes: Income tax (recovery) expense:
|
|
|
|
|
|
|
|
2022 |
|
2021 |
|
|
|
|
|
Current |
|
$— |
|
$— |
Deferred taxes recovery |
|
— |
|
(3,477,711) |
Total tax recovery |
|
$— |
|
$(3,477,711) |
Reconciliation of effective tax rate:
|
|
|
|
|
|
|
|
2022 |
|
2021 |
|
|
|
|
|
Loss before income taxes |
|
$(84,424,529) |
|
$(127,741,941) |
|
|
|
|
|
Basic combined Canadian statutory income tax rate 1 |
|
26.50% |
|
26.50% |
Income tax |
|
$(22,372,500) |
|
$(33,851,614) |
Increase (decrease) resulting from: |
|
|
|
|
Change in valuation allowance |
|
18,982,099 |
|
26,696,339 |
Permanent difference on impairment on goodwill |
|
788,642 |
|
999,782 |
Permanent difference related to derivative |
|
(1,656,038) |
|
(2,004,305) |
Non deductible and tax exempt items |
|
71,653 |
|
(347,773) |
Non-deductible stock-based compensation |
|
2,050,909 |
|
2,660,390 |
Foreign exchange |
|
236,512 |
|
(101,188) |
Difference in statutory tax rates of foreign subsidiaries |
|
1,121,068 |
|
2,778,258 |
Other permanent differences |
|
474,339 |
|
(571,275) |
Adjustments in relation to prior years |
|
303,316 |
|
263,675 |
Total tax recovery |
|
$— |
|
$(3,477,711) |
1 The Canadian combined statutory income tax rate. Components of the net deferred tax asset (liability)
|
|
|
|
|
|
|
|
March 31, |
|
March 31, |
|
|
2022 |
|
2021 |
|
|
|
|
|
Net operating losses ("NOL") and tax credit carryforwards |
|
$76,346,005 |
|
$61,321,242 |
Intangible assets and goodwill |
|
554,187 |
|
653,006 |
Reserves and accruals not currently deductible for tax purposes |
|
290,413 |
|
389,037 |
Financing fees not currently deductible for tax purposes |
|
1,446,462 |
|
22,651 |
Research and development costs |
|
3,098,560 |
|
533,372 |
Non-deductible interest |
|
3,349,307 |
|
3,985,157 |
Other |
|
1,693,301 |
|
1,723,027 |
Subtotal |
|
86,778,235 |
|
68,627,492 |
Less: valuation allowance |
|
83,934,321 |
|
64,418,752 |
Total net deferred tax assets |
|
2,843,914 |
|
4,208,740 |
|
|
|
|
|
Property, plant and equipment |
|
— |
|
(2,991,756) |
Intangible assets and goodwill |
|
(1,921,815) |
|
— |
Right-of-use assets |
|
(767,164) |
|
(748,475) |
Other |
|
(154,935) |
|
(468,509) |
Total deferred tax liabilities |
|
(2,843,914) |
|
(4,208,740) |
|
|
|
|
|
Net deferred tax |
|
$— |
|
$— |
Management assesses the available positive and negative evidence to determine the valuation allowance required with respect to the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative loss incurred over the years. Such objective evidence limits the ability to consider other subjective evidence, such as our projections for future growth. On the basis of this evaluation, as of March 31, 2022, a valuation allowance of $83,934,321 has been recorded to recognize only the portion of the deferred tax asset that is more likely than not to be realized. Tax losses carried forward We have income tax NOL carryforwards which will expire on various dates in the next 20 years as follows:
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|
|
|
|
|
|
|
Federal |
|
Provincial/State |
|
|
|
|
|
2027 |
|
46,000 |
|
|
2028 |
|
- |
|
|
2029 |
|
- |
|
|
2030 |
|
- |
|
149,000 |
2031 |
|
474,000 |
|
1,523,000 |
2032 |
|
4,249,000 |
|
741,000 |
2033 |
|
11,099,000 |
|
11,210,000 |
2034 |
|
16,244,000 |
|
15,247,000 |
2035 |
|
11,275,000 |
|
10,429,000 |
2036 |
|
18,956,000 |
|
18,399,000 |
2037 |
|
9,835,000 |
|
9,178,000 |
2038 |
|
22,000 |
|
18,000 |
2039 |
|
7,974,000 |
|
8,473,000 |
2040 |
|
32,672,000 |
|
39,443,000 |
2041 |
|
42,380,000 |
|
40,506,000 |
2042 |
|
38,544,000 |
|
38,149,000 |
|
|
|
|
|
|
|
$193,770,000 |
|
$193,465,000 |
As at March 31, 2022, the Corporation had NOL that can be carried forward indefinitely ($101,174,000 for federal purposes and $96,884,000 for States purposes). As at March 31, 2022, the Corporation had realized and unrealized capital losses of $2,060,000 ($2,709,000 in 2021) that can be carried forward indefinitely. Tax credits receivable and recoverable Unused federal Investment tax credits may be used to reduce federal income tax payable and expire as follows:
|
|
|
|
2023 |
|
$174,000 |
2024 |
|
60,000 |
2025 |
|
43,000 |
2026 |
|
73,000 |
2027 |
|
116,000 |
2028 |
|
51,000 |
2029 |
|
113,000 |
2030 |
|
179,000 |
2031 |
|
216,000 |
2032 |
|
126,000 |
2033 |
|
104,000 |
2034 |
|
94,000 |
2035 |
|
234,000 |
2036 |
|
168,000 |
2037 |
|
127,000 |
2038 |
|
50,000 |
2039 |
|
58,000 |
|
|
$1,986,000 |
The amounts recorded as tax credits receivable or recoverable are subject to a government tax audit and the final amount received may differ from those recorded.
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