Management's Discussion and Analysis (cont’d) has committed to spend $3 million in product development  activities in the Province of Newfoundland and Labrador  and new equipment for Burin. Of these expenditures, 60%  must be product development expenditures. In fiscal 2011  and 2010, the Company paid $0.7 million (relating to the  production shortfall). If the Company ceases permanent  operation of the plant in Burin it must pay the Province  $12,500 for each unionized worker (who has been employed  at Burin and is losing employment in the year of closure) to  be used as a worker transition fund by the Province. Based on  current employment levels this would be approximately $1.5 million. The Company has current operating plans  for Burin but may or may not maintain the agreed-upon  production levels. The Company has also agreed not to sell its U.S. operations  during the period ending December 2012 without making a  payment to the Province of Newfoundland and Labrador of $5 million.  High Liner’s effective income tax rate in 2011 is 33.9%,  compared to 38.7% for 2010. Our Canadian statutory rate  for 2011 was approximately 29%. The effective rate in  2011 is higher than the statutory rate due to a higher U.S.  statutory tax rate of 38.6%, and due to the tax treatment  of certain business acquisition costs that are only partially  deductible or non-deductible for tax purposes. During 2011,  the Company recorded an additional $0.8 million of non- deductible one-time withholding tax relating to the dividend  that was paid in connection with the financing for the Viking Acquisition. 4.6 INCOME TAxES  On December 19, 2011, High Liner acquired operations of  U.S. subsidiary (Icelandic USA) and Asian procurement  operations of Icelandic Group h.f., one of the largest suppliers  of value-added seafood to the U.S. food service market. Since  the acquisition was concluded late in the fiscal year, 2011  includes only 13 days of operations from the Icelandic USA  Acquisition. The narrative in this section aims to assist the  reader in understanding both the financial statements and  the underlying performance of the business in 2011, together  with our views on how the Icelandic USA Acquisition will  contribute to High Liner in 2012 and beyond.  5.1 ThE ICELANDIC USA AND VIkINg ACqUISITIONS 5. pERFORMANCE The Icelandic USA Acquisition is another milestone on our  journey to becoming a larger company and in growing our  EBITDA. It immediately increased our pro forma EBITDA by  an estimated $29.6 million and synergies expected 1  to be  realized in the future will further increase EBITDA. Moreover,  it moves us closer to our vision to be the North American  leader in frozen value-added seafood. The acquisition has  brought to High Liner a complementary food service business  in the U.S., adding to the strong business we acquired in  2007 from FPI and in 2010 from Viking. The Icelandic USA  Acquisition will also continue to increase our competitive  advantage in procuring raw material and finished goods.  Sales from the Icelandic USA Acquisition from the closing  date of December 19, 2011 to December 31, 2011 were $9.0 million (US$8.7 million) and Adjusted EBITDA was $1.0 million (US$0.9 million). The table below shows the high  level view of sales and Adjusted EBITDA as reported: ANNUAL REPORT 2011 31 As part of the FPI acquisition in 2007, the Company entered  into an agreement with the Province of Newfoundland  and Labrador with respect to its operations in Burin,  Newfoundland, and relating to its U.S. operations. The  Company has agreed to maintain specified volumes of  production in the plant until December 2012. Failure to  maintain these volumes will result in a payment to the  Province of Newfoundland and Labrador of $0.07 per pound for each pound of volume shortfall. In addition, over the period ending in December 2012, the Company  4.8 CONTRACTUAL ARRANgEMENTS  4.7 CONTINgENCIES We have no material contingencies that are outstanding.  See Note 20 to the annual financial statements for full  information with respect to income taxes. Loss carry- forwards are still available in the U.S. operations to reduce  cash taxes for the next year or two. The Canadian statutory  income tax rate for 2012 is approximately 28%.  The effective rate in 2010 is also higher than our statutory  rate as we declared and paid a dividend in December of 2010  from our U.S. subsidiary to High Liner. This dividend was in  connection with the financing for the Viking Acquisition, and  was subject to a 5% non-deductible one-time withholding  tax of $1.0 million, which is recorded in our income tax  expense for 2010. As well, we recorded $3.7 million of stock  compensation expense, which increased our effective tax rate  as it was not deductible for income tax purposes.  The Canadian income tax rules changed in 2010 regarding  the tax deductibility of stock option expense. The cash- settling of stock options by employees is no longer deductible  to the employer if the employee is entitled to the stock option  deduction. Generally, the stock option deduction is only  available to employees where they acquire securities of their  employer or if the employer makes an election to forgo the  deduction for a cash payment. The Company reviewed the  changes to these rules and elected in 2010 to forgo the tax  deduction on any amount paid to the employee in respect  of the employee’s disposition of their rights under the  Company’s stock option program. 