Algonquin Power & Utilities Corp. – Consolidated Financial Statements 17. Income taxes The provision for income taxes in the Consolidated Statements of Operations represents an  effective tax rate different than the Canadian enacted statutory rate of 26.5% (2011 – 28.25%). The  differences are as follows: For the years ended December 31, 2012 and 2011, income/(loss) from continuing operations before  taxes consists of the following:  As a result of the business combination transaction in 2009, APUC recorded certain additional tax  attributes. These tax attributes have been recognized to the extent management believes they  are more likely than not to be realized. The excess of the carrying amount of the tax attributes  recorded over the consideration was recorded as a deferred credit of $55,647 on the transaction  date. The deferred credit is being recognized in income as a deferred income tax recovery in  relative proportion to the amount of the related tax attributes that are utilized in the period.  Income tax expense (recovery) attributable to income/(loss) consists of:  2012 Annual Report 119 Current Deferred  Total  Year ended December 31, 2012  Canada  $ 127  $ (137)  $ (10) United States  611  (14,167)  (13,556) $ 738  $ (14,304)  $ (13,566) Year ended December 31, 2011  Canada  $ 268  $ (1,936)  $ (1,668) United States  32  (20,911)  (20,879) $ 300  $ (22,847)  $ (22,547) 2012 2011 Canadian operations  $ 15,252  $ (5,242)  U.S. operations  (5,715)  10,749  $ 9,537  $ 5,507  2012 2011 Expected income tax expense / (recovery) at Canadian  statutory rate  $2,527  $ 1,555 Increase (decrease) resulting from:  Recognition of deferred credit  (5,092)  (6,581) Effect of differences in tax rates on transactions in and within foreign jurisdictions and change in tax rates  (6,282)  (1,592) Non-taxable corporate dividend  (666)  (591) Non-controlling interests share of income  (2,835)  (1,317) Production tax credit  (676)  - Allowance for equity funds used during construction  (402)  - Change in valuation allowances  -  (16,834) Foreign currency on intercompany items  -  2,250  Other (140) 563 Income tax recovery  $ (13,566)  $(22,547) Notes to the Consolidated Financial Statements  December 31, 2012 and 2011   (in thousands of Canadian dollars except as noted and amounts per share)  ALGONQUIN POWER & UTILITIES CORP. 