Orbit Garant 2012 annual rep O rt 55 15. INCOME TA x ES Income tax expense comprises the following: June 30 June 30 2012 2011 $ $ Current tax Current year 4,713 5,569 Prior year adjustments (3) 78 4,710 5,647 Deferred tax Current year (11) (348) Effect of corporate tax rate modifcation 23 3 12 (345) 4,722 5,302 Income tax expense differs from the amounts calculated by applying Canadian statutory rates (federal and provincial) with detai ls as follows: June 30 June 30 2012 2011 $ $ Earnings before income taxes 15,082 16,748 Statutory rates 27.27% 29.20% Income taxes based on statutory rates 4,112 4,890 Increase (decrease) of income taxes to the following: Non-deductible expenses and other 304 193 Non-deductible share-based compensation expense 275 239 Non-taxable share in net earnings of a company subject to signifcant infuence — (66) Effect of corporate tax rate modifcation 23 3 Prior year adjustments (3) 78 Non-taxable portion of capital gain (3) (69) Change in fair value of contingent consideration 14 34 Total income taxes 4,722 5,302 Deferred income taxes are based on differences between the accounting and tax values of assets and liabilities and consis t of the following as at the dates presented: Recognized in Business June 30 statements of acquisitions June 30 2011 earnings (Note 2) 2012 $ $ $ $ Deferred income tax assets: Share issue costs 217 (217) — — Long-term investments — — — — Total deferred income tax assets 217 (217) — — Deferred income tax liabilities: Property, plant and equipment 1,098 344 577 2,019 Intangible assets 1,734 (549) 281 1,466 Total deferred income tax liabilities 2,832 (205) 858 3,485 Net deferred income tax liabilities 2,615 12 858 3,485