The Company had no income taxes payable at December 31, 2016 and 2015.
The reconciliation of income tax provision computed at statutory rates to the reported income tax provision is as follows:
| 2016 | 2015 | |||||||
| Net loss for the year | $ | (2,999,110 | ) | $ | (8,964,960 | ) | ||
| Effective statutory rate | 34 | % | 34 | % | ||||
| Expected tax recovery | $ | (1,019,697 | ) | $ | (3,048,086 | ) | ||
| Net effects of non deductible and allowable items | 254,917 | 1,742,542 | ||||||
| Change in valuation allowance | 764,780 | 1,305,544 | ||||||
| $ | - | $ | - | |||||
Deferred income taxes reflect the net income tax effect of temporary differences between the carrying amounts of the assets and liabilities for financial reporting purposes and amounts used for income taxes. The Company's deferred income tax assets and liabilities consist of the following:
| 2016 | 2015 | |||||||
| Net operating loss carry forward | $ | 5,525,126 | $ | 4,779,729 | ||||
| Equipment | 138,154 | 118,771 | ||||||
| Valuation allowance | (5,663,280 | ) | (4,898,500 | ) | ||||
| Deferred tax assets, net of valuation allowance | $ | - | $ | - | ||||
Net operating loss carry forwards totaled approximately $16,250,000 at December 31, 2016. The net operating loss carry forwards will begin to expire in the year 2021 if not utilized. After consideration of all the evidence, management has recorded a valuation allowance at December 31, 2016 due to uncertainty of realizing the deferred tax assets. Utilization of the Company's net operating loss carry forwards may be limited based on changes in ownership as defined in Internal Revenue Code Section 382. Tax years 2011 through 2016 remain open to examination by tax authorities.