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The tax provision differs from the amount computed by applying the combined Canadian federal and provincial statutory income tax rates to income before future income tax recovery as follows: 2004 Income before future income tax recovery
$
Expected income tax expense at statutory rates
219,541
2003 $
196,657
85,410
80,118
(86,547)
(92,299)
Effect on income tax of: Net income of the Trust Effect of change in corporate tax rate
(5,861)
(66,099)
(13,341)
(10,857)
Unrealized (gain) loss on foreign exchange
(8,412)
(7,618)
Non-deductible crown charges
1,304
2,434
Resource allowance
Alberta Royalty Tax Credit Capital tax Future income tax recovery
$
244
39
1,103
738
(26,100)
$
(93,544)
The net future income tax liability comprises the following: 2004
2003
Future tax liabilities: Capital assets in excess of tax value
$
345,987
$
350,837
Future tax assets: Non-capital losses
(19,429)
(23,068)
Asset retirement obligations
(19,434)
(17,721)
Commodity and foreign currency contracts
(1,384)
(1,049)
Attributed Canadian royalty income
(5,289)
(6,767)
Deductible share issue costs Net future income tax liability
(45) $
300,406
(267) $
301,965
The petroleum and natural gas properties and facilities owned by the Trust’s corporate subsidiaries have an approximate tax basis of $364.6 million ($288.9 million in 2003) available for future use as deductions from taxable income. Included in this tax basis are estimated non-capital loss carry forwards of $56.7 million ($66 million in 2003) that expire in the years through 2010. No current income taxes were paid or payable in 2004 or 2003.
12. UNITHOLDERS ’ CAPITAL The Trust is authorized to issue 650 million trust units of which 185.8 million units were issued and outstanding as at December 31, 2004 (179.8 million as at December 31, 2003). On June 8, 2004, the Trust issued 2,032,358 trust units at $15.01 per unit for proceeds of $30.5 million in conjunction with the acquisition of United Prestville Ltd. The Trust has in place a Distribution Reinvestment and Optional Cash Payment Program Plan (“DRIP”) in conjunction with the Trust’s transfer agent to provide the option for unitholders to reinvest cash distributions into additional trust units issued from treasury at a five per cent discount to the prevailing market price with no additional fees or commissions.
2004 ANNUAL REPORT
81