v3.26.1
Income Taxes
 3 Months Ended
Mar. 31, 2026
Income Tax Disclosure [Abstract]  
Income Taxes

7.

Income Taxes

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2026

 

 

2025

 

 

 

 

 

 

 

 

Current Tax

 

 

 

 

 

 

United States

 

$

1

 

 

$

11

 

Canada

 

 

12

 

 

 

32

 

Total Current Tax Expense (Recovery)

 

 

13

 

 

 

43

 

 

 

 

 

 

 

 

Deferred Tax

 

 

 

 

 

 

United States

 

 

(245

)

 

 

96

 

Canada

 

 

35

 

 

 

(173

)

Total Deferred Tax Expense (Recovery)

 

 

(210

)

 

 

(77

)

Income Tax Expense (Recovery)

 

$

(197

)

 

$

(34

)

Effective Tax Rate

 

 

23.8

%

 

 

17.6

%

 

Ovintiv’s interim income tax expense is determined using the estimated annual effective income tax rate applied to year-to-date net earnings before income tax plus the effect of legislative changes and amounts in respect of prior periods. The estimated annual effective income tax rate is impacted by expected annual earnings, changes in valuation allowances, income tax related to foreign operations, state taxes, the effect of legislative changes, non-taxable items and tax differences on transactions, which can produce interim effective tax rate fluctuations.

 

During the three months ended March 31, 2026, Canadian current income tax expense includes a recovery related to recently enacted Canadian legislation that accelerates capital cost recovery for years beginning in 2025.

 

The effective tax rate of 23.8 percent for the three months ended March 31, 2026, is higher than the U.S. federal statutory rate of 21 percent primarily due to the impact of foreign operations.

 

The effective tax rate of 17.6 percent for the three months ended March 31, 2025, was lower than the U.S. federal statutory rate of 21 percent primarily due to resolution of prior period tax items.