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Canada | Northwest Territories budget 2025-26
- The Northwest Territories budget for 2025/2026 has been tabled.
- The budget contains no new taxes and no income tax increases.
- This Alert summarizes the key tax measures.
On 6 February 2025, Northwest Territories Finance Minister Caroline Wawzonek tabled the territory's fiscal 2025-26 budget. The budget contains no new taxes and no income tax increases.
The minister anticipates an operating surplus of CA$69m for 2024-25 and projects an operating surplus of CA$170m for 2025-26, as well as operating surpluses for each of the next three years.
Following is a brief summary of the key tax measures.
Corporate income tax rates
No changes are proposed to the corporate income tax rates or the CA$500k small-business limit.
The Northwest Territories 2025 corporate income tax rates are summarized in Table A.
Table A — 2025 Northwest Territories (NWT) corporate income tax rates1
|
2025 |
2025 |
|
|---|---|---|
|
NWT |
Federal and NWT combined |
|
|
Small-business tax rate2 |
2.00% |
11.00% |
|
General corporate tax rate3, 4 |
11.50% |
26.50% |
1 The rates represent calendar-year-end rates unless otherwise indicated.
2 The federal corporate income tax rates for manufacturers of qualifying zero-emission technology are reduced to 7.5% for eligible income otherwise subject to the 15% federal general corporate income tax rate or 4.5% for eligible income otherwise subject to the 9% federal small-business corporate income tax rate. These reductions are not reflected in the combined federal and Northwest Territories rates above.
3 Id.
4 An additional tax applies to banks and life insurers at a rate of 1.5% on taxable income (subject to a CA$100m exemption to be shared by group members).
Personal income tax rates
The budget does not include any changes to personal income tax rates.
The 2025 Northwest Territories personal income tax rates are summarized in Table B.
Table B — 2025 Northwest Territories personal income tax rates
|
First bracket rate |
Second bracket rate |
Third bracket rate |
Fourth bracket rate |
|---|---|---|---|
|
CA$0 to CA$51,964 |
CA$51,965 to CA$103,930 |
CA$103,931 to CA$168,967 |
Above CA$168,967 |
|
5.90% |
8.60% |
12.20% |
14.05% |
For taxable income exceeding CA$168,967, the 2025 combined federal-Northwest Territories personal income tax rates are outlined in Table C.
Table C — Combined 2025 federal and Northwest Territories personal income tax rates
|
Bracket |
Ordinary income1 |
Eligible dividends |
Non-eligible dividends |
|---|---|---|---|
|
CA$168,968 to CA$177,882 |
40.05% |
18.67% |
28.77% |
|
CA$177,883 to CA$253,4142 |
43.37% |
23.25% |
32.59% |
|
Above CA$253,414 |
47.05% |
28.33% |
36.82% |
1 The rate on capital gains is one-half the ordinary income tax rate.
2 The federal basic personal amount comprises two elements: the base amount (CA$14,538 for 2025) and an additional amount (CA$1,591 for 2025). The additional amount is reduced for individuals with net income exceeding CA$177,882 and is fully eliminated for individuals with net income exceeding CA$253,414. Consequently, the additional amount is clawed back on net income exceeding CA$177,882 until the additional tax credit of CA$239 is eliminated; this results in additional federal income tax (e.g., 0.32% on ordinary income) on net income between CA$177,883 and CA$253,414.
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 will increase CA$15 per carbon-equivalent ton of greenhouse gas emissions to CA$95 as of 1 April 2025 (with corresponding adjustments to the cost of living offset). However, until 31 March 2027, the Northwest Territories carbon tax on diesel heating fuel deliveries for all but large emitters will continue to be rebated at the source.
For up-to-date information on the federal, provincial and territorial budgets, visit ey.com/ca/Budget.
For additional information concerning this Alert, please contact:
Ernst & Young LLP (Canada), Toronto
- Linda Tang
- Mark Kaplan
- Terri McDowell
- Trevor O'Brien
Ernst & Young LLP (Canada), Quebec and Atlantic Canada
- Albert Anelli
- Angelo Nikolakakis
- Brian Mustard
- Nicolas Legault
- Nik Diksic
- Philippe-Antoine Morin
Ernst & Young LLP (Canada), Prairies
- Mark Coleman
- Liza Mathew
Ernst & Young LLP (Canada), Vancouver
- Eric Bretsen
Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor
For a full listing of contacts and email addresses, please click on the Tax News Update: Global Edition (GTNU) version of this Alert.