12. INCOME TAXES
The Company is subject to United States federal income taxes at an approximate rate of 35%. The reconciliation of the provision for income taxes at the United States federal statutory rate compared to the Company’s income tax expense as reported is as follows:
|
|
| February 28, 2017 | February 29, 2016 |
|
|
| $ | $ |
| Loss before income taxes |
| (2,724,306) | (370,324) |
| Statutory tax rate |
| 35% | 35% |
| Expected recovery of income taxes computed at statutory rates |
| (954,000) | (130,000) |
| Permanent differences |
| 680,000 | (43,000) |
| Reconciliation of tax rates and other |
| - | (132,000) |
| Effect of foreign exchange |
| 4,000 | - |
| Change in valuation allowance |
| 270,000 | 305,000 |
| Provision for income taxes |
| $ - | $ - |
The significant components of deferred income tax assets at February 28, 2017 and February 29, 2016 are as follows:
|
|
| February 28, 2017 | February 29, 2016 |
| Deferred income tax assets: |
|
|
|
| Operating loss carry forward |
| 1,483,000 | 1,209,000 |
| Oil and gas properties |
| 342,000 | 346,000 |
| Less: valuation allowance |
| (1,825,000) | (1,555,000) |
| Deferred income tax assets, net |
| - | - |
At February 28, 2017, the Company had accumulated non-capital loss carry-forwards of approximately $4,237,000 that expire from 2025 through 2037.
The potential future tax benefits of these expenses and losses carried-forward have not been reflected in these financial statements due to the uncertainty regarding their ultimate realization.
Tax attributes are subject to review, and potential adjustment by tax authorities.