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INCOME TAXES
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
INCOME TAX RATE RECONCILIATION
Year ended December 31,202420232022
(millions of Canadian dollars)   
Earnings before income taxes
7,2997,8794,542
Canadian federal statutory income tax rate15 %15 %15 %
Expected federal taxes at statutory rate1,0951,182681
Increase/(decrease) resulting from:   
Provincial and state income taxes1
183411108
Foreign and other statutory rate differentials2
340187295
Effects of rate-regulated accounting3.4
(192)(106)(122)
Write-off of regulatory deferrals3,5
4115—
Part VI.1 tax, net of federal Part I deduction3,6
736676
US Minimum Tax148100107
Non-taxable portion of gain on sale of investment3,7
(147)——
Valuation allowance3
(2)(12)6
Accounting impairment of non-deductible goodwill3,8
148—370
Noncontrolling interests3,9
(30)199
Investment and production tax credits(23)(47)—
Other3
71(94)74
Income tax expense1,6681,8211,604
Effective income tax rate22.9 %23.1 %35.3 %
1The change in provincial and state income taxes from 2023 to 2024 reflects the decrease in earnings from Canadian operations partially offset by an increase in earnings from US operations before considering the non-deductible goodwill impairment to the Gas Transmission segment. Refer to Note 13 - Long-Term Investments.
2The change in foreign and other statutory rate differentials from 2023 to 2024 reflects the increase in earnings from US operations before considering the non-deductible goodwill impairment to the Gas Transmission segment. Refer to Note 13 - Long-Term Investments.
3The provincial and state tax component of these items is included in the Provincial and state income taxes above.
4The amount in 2024 includes the effects of rate regulated accounting attributable to the Acquisitions. Refer to Note 8 - Acquisitions and Disposition.
5The amount in 2023 includes the federal tax impact of the de-recognition of rate-regulated accounting for income tax relating to Southern Lights Canada and portions of the Canadian Mainline including Line 9 and L3R. Refer to Note 7 - Regulatory Matters.
6Part VI.1 tax is a tax levied on preferred share dividends paid in Canada.
7The amount in 2024 represents the federal component of the non-taxable portion of the gain on sales relating to Alliance Pipeline and Aux Sable. Refer to Note 13 - Long-Term Investments.
8The amounts relates to the federal impact of the non-deductible goodwill impairment to the Gas Transmissions segment. Refer to Note 13 - Long-Term Investments and Note 15 - Goodwill.
9The amount in 2023 and 2022 includes the federal tax impact of impairments to Chapman Ranch and Magic Valley attributable to non-controlling interests in those respective years. Refer to Note 11 - Property, Plant and Equipment.
COMPONENTS OF PRETAX EARNINGS AND INCOME TAXES

Year ended December 31,202420232022
(millions of Canadian dollars)   
Earnings before income taxes
   
Canada1,035 2,233 583 
US5,231 4,620 2,865 
Other1,033 1,026 1,094 
 7,299 7,879 4,542 
Current income taxes   
Canada248 100 360 
US578 191 201 
Other123 110 86 
 949 401 647 
Deferred income taxes   
Canada(299)456 (358)
US1,013 974 1,309 
Other5 (10)6 
 719 1,420 957 
Income tax expense1,668 1,821 1,604 

COMPONENTS OF DEFERRED INCOME TAXES
Deferred income tax assets and liabilities are recognized for the future tax consequences of differences between carrying amounts of assets and liabilities and their respective tax bases. Major components of deferred income tax assets and liabilities are as follows:

December 31,20242023
(millions of Canadian dollars)  
Deferred income tax liabilities  
Property, plant and equipment(11,368)(9,202)
Investments(9,043)(7,765)
Regulatory assets(1,940)(1,338)
Other(251)(52)
Total deferred income tax liabilities(22,602)(18,357)
Deferred income tax assets  
Financial instruments740 271 
Loss carryforwards1,272 1,745 
Other2,088 1,798 
Total deferred income tax assets4,100 3,814 
Less valuation allowance(298)(147)
Total deferred income tax assets, net3,802 3,667 
Net deferred income tax liabilities, net
(18,800)(14,690)
Presented as follows:
Total deferred income tax assets796 341 
Total deferred income tax liabilities(19,596)(15,031)
Net deferred income tax liabilities, net
(18,800)(14,690)

A valuation allowance has been established for certain loss and credit carryforwards, and outside basis temporary differences on investments that reduce deferred income tax assets to an amount that will more likely than not be realized.
 
As at both December 31, 2024 and 2023, we recognized the benefit of unused tax loss carryforwards of $1.3 billion in Canada which expire in 2031 and beyond.

As at December 31, 2024, and 2023, we recognized the benefit of unused tax loss carryforwards of $4.2 billion and $6.4 billion, respectively, in the US with no expiration.

We have not provided for deferred income taxes on the difference between the carrying value of substantially all of our foreign subsidiaries and their corresponding tax basis as the earnings of those subsidiaries are intended to be permanently reinvested in their operations. As such, these investments are not anticipated to give rise to income taxes in the foreseeable future. The difference between the carrying values of the investments and their tax bases is largely a result of unremitted earnings and currency translation adjustments. The unremitted earnings and currency translation adjustment for which no deferred taxes have been recognized in respect of foreign subsidiaries were $9.5 billion and $6.6 billion for the periods ended December 31, 2024 and 2023, respectively. If such earnings are remitted, in the form of dividends or otherwise, we may be subject to income taxes and foreign withholding taxes. The determination of the amount of unrecognized deferred income tax liabilities applicable to such amounts is not practicable.

Enbridge and certain of our subsidiaries are subject to taxation in Canada, the US and other foreign jurisdictions. The material jurisdictions in which we are subject to potential examinations include the US (Federal) and Canada (Federal, Alberta and Québec). We are open to examination by Canadian tax authorities for the 2017 to 2024 tax years and by US tax authorities for the 2021 to 2024 tax years. We are currently under examination for income tax matters in Canada for the 2018 to 2021 tax years. We are not currently under examination for income tax matters in any other material jurisdiction where we are subject to income tax.

UNRECOGNIZED TAX BENEFITS
Year ended December 31,20242023
(millions of Canadian dollars)
Unrecognized tax benefits at beginning of year45 55 
Gross decreases for tax positions of prior year(2)(2)
Change in translation of foreign currency4 (1)
Lapses of statute of limitations(16)(7)
Unrecognized tax benefits at end of year31 45 
 
The unrecognized tax benefits as at December 31, 2024, if recognized, would impact our effective income tax rate. We do not anticipate further adjustments to the unrecognized tax benefits during the next 12 months that would have a material impact on our consolidated financial statements.

We recognize accrued interest and penalties related to unrecognized tax benefits as a component of income taxes. Interest and penalties included in income taxes for the years ended December 31, 2024 and 2023 were $8 million recovery and $1 million expense, respectively. As at December 31, 2024 and 2023, interest and penalties of $6 million and $14 million, respectively, have been accrued.