1 The rate on capital gains is one-half the ordinary income tax rate. However, as proposed in the 2024 federal budget, the rate on capital gains will increase from one-half to two-thirds the ordinary income tax rate on the portion of capital gains realized in the year exceeding $250,000, for capital gains realized on or after 25 June 2024. The annual $250,000 threshold will not be prorated for 2024 and will apply only in respect of net capital gains realized on or after 25 June 2024.
2 The federal basic personal amount comprises two elements: the base amount ($14,156 for 2024) and an additional amount ($1,549 for 2024). The additional amount is reduced for individuals with net income in excess of $173,205 and is fully eliminated for individuals with net income in excess of $246,752. Consequently, the additional amount is clawed back on net income in excess of $173,205 until the additional tax credit of $232 is eliminated; this results in additional federal income tax (e.g., 0.32% on ordinary income) on net income between $173,206 and $246,752.
Other tax measures
Property tax
In keeping with the existing indexing policy, property mill rates will be adjusted for inflation.
Carbon pricing
In line with the federal benchmark, the Northwest Territories carbon tax rate increased $15 per carbon-equivalent tonne of greenhouse gas emissions to $80 as of 1 April 2024 (with corresponding adjustments to the cost of living offset). However, as previously announced and effective 1 April 2024 to 31 March 2027, the Northwest Territories carbon tax on diesel heating fuel deliveries for all but large emitters will be rebated at source. This rebate follows the federal government’s October 2023 announcement to suspend the carbon tax on diesel heating fuel under its backstop carbon pricing system for three years.
Tax on vaping products
In accordance with the Northwest Territories’ agreement with the federal government to participate in the coordinated vaping product taxation framework, the Canada Revenue Agency will begin, on 1 July 2024, collecting Northwest Territories tax on vaping products sold in the territories. The rates to be levied will be in addition to, and the same as, the federal rates.
Learn more
For more information, please contact your EY or EY Law advisor.