INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2016

The components of (Loss) income before (recovery of) provision for income taxes for the years ended December 31, 2016, 2015 and 2014 were as follows:

The components of (Recovery of) provision for income taxes for the years ended December 31, 2016, 2015 and 2014 were as follows:

The reasons for this difference and the related tax effects for the years ended December 31, 2016, 2015 and 2014 were as follows:



(in millions)	2016			2015			2014⁽¹⁾
(Loss) income before (recovery of) provision for income taxes	$	(2,435	)	$	(155	)	$	1,054
Expected Canadian statutory rate	26.9		%	26.9		%	26.9		%
Expected (recovery) provision for of income taxes	(655		)	(42		)	284
Non-deductible amounts:
Share-based compensation	30			4			20
Merger and acquisition costs	—			3			—
Adjustments to tax attributes	(147		)	(87		)	(33		)
Non-taxable gain on disposal of investments	—			—			(50		)
Changes in enacted income tax rates	—			—			30
Canadian tax impact of foreign exchange gain or loss on U.S. dollar denominated debt held by VPII and its Canadian Affiliates	11			174			23
Change in valuation allowance related to foreign tax credits and net operating losses	155			114			17
Change in valuation allowance on Canadian deferred tax assets and tax rate changes	472			230			255
Pharma fee	15			16			3
Change in uncertain tax positions	10			—			(2		)
Foreign tax rate differences	(290		)	(350		)	(230		)
Withholding taxes on foreign income	7			7			4
Goodwill impairment	377			—			—
Taxable foreign income	391			441			269
Tax benefit on intra-entity transfers	(399		)	(375		)	(420		)
Other	(4		)	(2		)	4
	$	(27	)	$	133		$	174

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(1)	In 2014, $273 million of tax benefit on intra-entity transfers was included within the foreign tax rate differences and has been revised using the current presentation.

The tax effect of major items recorded as deferred tax assets and liabilities as of December 31, 2016 and 2015 is as follows:



(in millions)	2016			2015
Deferred tax assets:
Tax loss carryforwards	$	1,328		$	1,440
Tax credit carryforwards	422			295
Scientific Research and Experimental Development pool	53			51
Research and development tax credits	129			134
Provisions	563			594
Deferred revenue	15			13
Deferred financing and share issue costs	391			525
Share-based compensation	37			68
Total deferred tax assets	2,938			3,120
Less valuation allowance	(1,857		)	(1,366		)
Net deferred tax assets	1,081			1,754
Deferred tax liabilities:
Intangible assets	4,044			4,711
Outside basis differences	2,165			2,607
Plant, equipment and technology	24			16
Prepaid expenses	80			96
Other	56			71
Total deferred tax liabilities	6,369			7,501
Net deferred income taxes	$	(5,288	)	$	(5,747	)

The following table presents a reconciliation of the unrecognized tax benefits for 2016, 2015 and 2014:



(in millions)	2016			2015			2014
Balance, beginning of year	$	344		$	345		$	248
Acquisition of Salix	—			15			—
Additions based on tax positions related to the current year	16			5			143
Additions for tax positions of prior years	96			23			13
Reductions for tax positions of prior years	(20		)	(39		)	(51		)
Lapse of statute of limitations	(13		)	(5		)	(8		)
Balance, end of year	$	423		$	344		$	345