8.INCOME TAXES
The following table reconciles income taxes at the Corporation’s domestic statutory tax rate of 26.8% in 2017 (26.9% in 2016 and 2015), and income taxes in the consolidated statements of income:
|
|
|
2017 |
|
2016 |
|
2015 |
|
|||
|
|
|
|
|
|
|
|
|
|||
|
Income taxes at domestic statutory tax rate |
|
$ |
280,185 |
|
$ |
178,655 |
|
$ |
190,067 |
|
|
(Reduction) increase resulting from: |
|
|
|
|
|
|
|
|||
|
Effect of non-deductible charges and non-taxable income |
|
(50,269 |
) |
(19 |
) |
3,060 |
|
|||
|
Change in benefit arising from the recognition of current and prior year tax losses |
|
(2,671 |
) |
(491 |
) |
2,179 |
|
|||
|
Change in deferred tax balances due to a change in substantively enacted tax rates |
|
— |
|
(6,376 |
) |
— |
|
|||
|
Effect of tax consolidation transactions with the parent corporation and affiliated corporations |
|
(96,732 |
) |
(55,020 |
) |
(58,173 |
) |
|||
|
Other1 |
|
718 |
|
161 |
|
(16,468 |
) |
|||
|
|
|
|
|
|
|
|
|
|||
|
Income taxes |
|
$ |
131,231 |
|
$ |
116,910 |
|
$ |
120,665 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 |
Includes in 2015 a decrease of $16.1 million in income tax liability resulting from developments in tax audit matters, jurisprudence and tax legislation. |
The significant items comprising the Corporation’s net deferred income tax liability and their impact on the deferred income tax expense are as follows:
|
|
|
Consolidated |
|
Consolidated |
|
|||||||||||
|
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
2015 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Accounts payable, accrued charges and provisions |
|
$ |
10,470 |
|
$ |
11,655 |
|
$ |
(1,185 |
) |
$ |
1,365 |
|
$ |
5,342 |
|
|
Defined benefit plans |
|
19,497 |
|
17,398 |
|
220 |
|
1,548 |
|
1,085 |
|
|||||
|
Fixed assets |
|
(483,882 |
) |
(399,022 |
) |
(84,860 |
) |
(10,049 |
) |
(2,758 |
) |
|||||
|
Goodwill and intangible assets |
|
(179,876 |
) |
(126,900 |
) |
(52,976 |
) |
(23,440 |
) |
(47,477 |
) |
|||||
|
Long-term debt and derivative financial instruments |
|
(8,772 |
) |
(25,489 |
) |
4,740 |
|
(424 |
) |
(13,908 |
) |
|||||
|
Benefits from a general partnership |
|
— |
|
(574 |
) |
574 |
|
67,044 |
|
(11,108 |
) |
|||||
|
Other |
|
(3,595 |
) |
(2,603 |
) |
(992 |
) |
1,022 |
|
2,571 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
$ |
(646,158 |
) |
$ |
(525,535 |
) |
$ |
(134,479 |
) |
$ |
37,066 |
|
$ |
(66,253 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in the net deferred income tax liability are as follows:
|
|
|
2017 |
|
2016 |
|
||
|
|
|
|
|
|
|
||
|
Balance at beginning of year |
|
$ |
(525,535 |
) |
$ |
(561,318 |
) |
|
Recognized in income |
|
(134,479 |
) |
37,066 |
|
||
|
Recognized in other comprehensive income |
|
13,856 |
|
6,213 |
|
||
|
Business acquisition (note 10) |
|
— |
|
(7,496 |
) |
||
|
|
|
|
|
|
|
||
|
Balance at end of year |
|
$ |
(646,158 |
) |
$ |
(525,535 |
) |
|
|
|
|
|
|
|
|
|
There are no income tax consequences attached to the payment of dividends or distributions in 2017, 2016 or 2015 by the Corporation to its shareholder.