| INCOME TAXES [Text Block] |
| 10. |
INCOME TAXES |
| |
|
| |
The Company has non-capital losses of approximately $18.5 million in the United States and $3.4 million (CDN$4.6 million) in Canada available, which may be applied against future taxable income and which expire as follows: |
| |
|
USA |
|
|
Canada |
|
|
Total |
|
| 2025 |
$ |
188,000 |
|
$ |
|
|
$ |
188,000 |
|
| 2026 |
|
610,000 |
|
|
|
|
|
610,000 |
|
| 2027 |
|
1,731,000 |
|
|
|
|
|
1,731,000 |
|
| 2028 |
|
3,175,000 |
|
|
|
|
|
3,175,000 |
|
| 2029 |
|
2,793,000 |
|
|
|
|
|
2,793,000 |
|
| 2030 |
|
2,045,000 |
|
|
|
|
|
2,045,000 |
|
| 2031 |
|
- |
|
|
|
|
|
- |
|
| 2032 |
|
1,999,000 |
|
|
|
|
|
1,999,000 |
|
| 2033 |
|
36,000 |
|
|
|
|
|
36,000 |
|
| 2034 |
|
948,000 |
|
|
820,000 |
|
|
1,768,000 |
|
| 2035 |
|
561,000 |
|
|
1,061,000 |
|
|
1,622,000 |
|
| 2036 |
|
699,000 |
|
|
958,000 |
|
|
1,657,000 |
|
| 2037 |
|
1,564,000 |
|
|
555,000 |
|
|
2,119,000 |
|
| 2038 |
|
2,153,000 |
|
|
38,000 |
|
|
2,191,000 |
|
| |
$ |
18,502,000 |
|
$ |
3,432,000 |
|
$ |
21,934,000 |
|
The reconciliation of income taxes at statutory income tax rates (U.S. – 21% and Canada – 26.5% on their respective losses) to the income tax expense is as follows:
| |
|
November |
|
|
November |
|
| |
|
30, 2018 |
|
|
30, 2017 |
|
| |
|
|
|
|
|
|
| Loss before income taxes |
$ |
(2,153,000) |
|
$ |
(2,800,251) |
|
| Income tax recovery at statutory rate |
|
(455,000) |
|
|
(932,000) |
|
| Change in U.S. tax rates |
|
2,321,000 |
|
|
- |
|
| Permanent differences |
|
42,000 |
|
|
(74,000) |
|
| Tax benefit not recognized |
|
(1,908,000) |
|
|
1,006,000 |
|
| Income taxes – current and deferred |
$ |
- |
|
$ |
- |
|
The above changes in tax rates are a result of the US Tax Cuts and Jobs Act.
The Company had an effective tax rate of nil as the tax losses are fully reserved by an allowance.
Deferred tax asset components as of November 30, 2018 and 2017 are as follows:
| |
|
2018 |
|
|
2017 |
|
| Non-capital losses available to offset future income-taxes |
$ |
21,934,000 |
|
$ |
20,084,000 |
|
| |
|
|
|
|
|
|
| Expected income tax recovery at statutory rates |
$ |
(4,795,000 |
) |
$ |
(4,410,000 |
) |
| Valuation allowance |
$ |
4,795,000 |
|
$ |
4,410,000 |
|
| Net deferred tax assets |
|
- |
|
|
- |
|
As the Company has recognized substantial cumulative losses from operations and has not earned significant revenues, it has provided a 100% valuation allowance on the net deferred tax assets as of November 30, 2018 and 2017. Management believes the Company has no uncertain tax positions that were material.
|