notes to the Consolidated Financial Statements (cont’d) 20. INCOmE TAx ExPENSE Consolidated income statement  The major components of income tax expense (recovery) for the fifty-two week periods ended December 31, 2011 and January 1, 2011  were as follows: Consolidated statement of other comprehensive loss A reconciliation between tax expense and the product of accounting profit multiplied by the Company’s statutory tax rate for the  fifty-two week periods ended December 31, 2011 and January 1, 2011 are as follows: During the year the Company’s statutory rate declined by approximately 1.8% primarily as a result of previously enacted tax rate reductions. (Amounts in $000s) Fiscal 2011 Fiscal 2010 Accounting profit before tax  At statutory income tax rate of 28.8% (2010 – 30.6%)  $  7,923 $  9,972  Non-deductible expenses for tax purposes:  Withholding tax on dividends  800   1,006  Stock options  186  1,085  Non-deductible business acquisition costs   1,534 – Other non-deductible items  167  125  Effect of higher income tax rates of U.S. subsidiary  835  1,489  Acquisition financing deduction  (2,175)  (1,031) Other  62  (7) At the effective income tax rate of 33.9% (2010 – 38.7%) $   9,332 $   12,639  (Amounts in $000s) December 31, 2011  January 1, 2011 Income tax expense (recovery) related to items charged or credited directly to other  comprehensive income and retained earnings during the period:  Gain on hedge of net investment in foreign operations  $   (44) $   138  Effective portion of changes in fair value of cash flow hedges 427  (881) Net change in fair value of cash flow hedges transferred to income 178  1,172  Defined benefit plan actuarial recovery (loss)   (400)   (638) Income tax expense (recovery) directly to other comprehensive income and retained earnings $   161  $   (209) (Amounts in $000s) December 31, 2011  January 1, 2011 Current tax expense:  Current period $  5,692  $  6,380 Deferred income tax: Origination and reversal of temporary differences  3,658   5,967  Change in tax rate applicable to reversal of temporary differences   (18)  483  Recognition of previously unrecognized tax asset  –  (191) Income tax expense reported in the income statement  $   9,332  $   12,639  89 AnnuAl RepoRt 2011