INCOME TAXES

12 Months Ended

Sep. 30, 2020

INCOME TAXES

INCOME TAXES

14.    INCOME TAXES

A reconciliation of income taxes at statutory rates is as follows:

For the years ended September 30	2020		2019
Loss for the year before income tax	$	(23,734,017)	$	(12,718,912)
Tax recovery at statutory income tax rates	$	(6,408,000)	$	(3,434,000)
Non-deductible share-based payments		2,031,000		227,000
Taxable capital gains		—		346,000
Other permanent differences including foreign exchange		21,000		3,000
Share issue costs		(849,000)		(720,000)
Change in statutory, foreign tax, foreign exchange rates and other		1,013,353		457,920
Adjustment to prior years provision versus statutory tax returns and expiry of non-capital losses		(307,000)		(196,000)
Change in valuation allowance		4,210,000		3,354,000
Total income tax expense	$	(288,647)	$	37,920

In September 2017, the British Columbia (BC) Government proposed changes to the general corporate income tax rate to increase the rate from 11% to 12% effective January 1, 2018 and onwards. This change in tax rate was substantively enacted on October 26, 2017. The relevant deferred tax balances have been remeasured to reflect the increase in the Company's combined Federal and Provincial (BC) general corporate income tax rate from 26% to 27%.

In December 2017, the United States Government proposed changes to the Federal corporate income tax rate to reduce the rate from 34% to 21% effective January 1, 2018 and onwards. This change in tax rate was enacted on December 22, 2017. The relevant deferred tax balances have been remeasured to reflect the decrease in the Company’s Federal income tax rate from 34% to 21% applicable to the Company’s US subsidiary. Operating losses carried forward as at September 30, 2020 expire from 2031 – 2039. Financing costs expire from 2040 to 2044. Investment tax credits expire in 2035.

Tax attributes are subject to review, and potential adjustment, by tax authorities. The Company has recorded an income tax recovery of $288,647 for the year ended September 30, 2020 (2019 – expense of $37,920) in relation to taxable income generated by its US subsidiary.

For the years ended September 30, 2020 and 2019, the Company did not record a provision for income taxes due to a full valuation allowance against our deferred tax assets. The significant components of the Company’s deferred tax assets are as follows:

Deferred tax assets	2020		2019
Operating losses carried forward	$	21,297,000	$	17,306,000
Equipment and intangible assets		77,000		77,000
Investment tax credits		39,000		137,000
Financing costs		1,462,000		1,159,000
		22,875,000		18,679,000
Valuation allowance		(22,875,000)		(18,679,000)
Net future tax assets	$	—	$	—