Northwest Territories Provincial Budget Tax Updates 2025-2026
Overview
On February 6, 2025, Northwest Territories’ government has presented its 2025-2026 budget. This comprehensive summary highlights the key changes that will influence Northwest Territories’ tax environment in the coming years.
Personal Income Tax Measures
There are no proposed changes to personal income tax rates for 2025.
The income tax rates for the 2025 taxation year, based your taxable income, are as follows:
| Taxable income | Rate |
| $51,964 or less | 5.90% |
| More than $51,964 but not more than $103,930 | 8.60% |
| More than $103,930 but not more than $168,967 | 12.20% |
| More than $168,967 | 14.05% |
The current personal combined income tax rates for top marginal tax rate in 2025 are outlined below:
| Taxable income above $253,414 | Rate |
| Interest/regular income | 47.05% |
| Capital gains | 23.53% |
| Eligible dividends | 28.33% |
| Non‑eligible dividends | 36.82% |
Corporate Income Tax Measures
There are no proposed changes to corporate income tax rates or the $500,000 small-business limit for 2025.
The corporate income tax rates for Northwest Territories in 2025 are as follows:
| Provincial tax rate | Federal and provincial combined tax rate | |
| Small-business tax rate[1] | 2.00% | 11.00% |
| Manufacturing and processing tax rate | 11.50% | 26.50% |
| General corporate tax rate | 11.50% | 26.50% |
Other Tax Measures
Property Tax Adjustment
In keeping with the existing indexing policy, property and education mill rates will increase by the rate of inflation.
Carbon Tax Increase
Effective April 1, 2025, the carbon tax rate will rise by $15 to $95 per tonne of greenhouse gas emissions. This increase is projected to generate an additional $12.9 million in revenue, which will be returned to residents, communities, and industries through carbon tax offsets and invested in projects that reduce emissions. Aviation fuel and diesel fuel used to generate electricity for community distribution continues to be exempt from carbon tax.
Temporary Rebate on Diesel Heating Fuel
From April 1, 2024, to March 31, 2027, the carbon tax on diesel heating fuel is rebated at source, except for large emitters. This aligns with the federal government’s October 2023 decision to suspend the carbon tax on diesel heating fuel under its backstop carbon pricing system.
For further information, visit https://www.gov.nt.ca/en/newsroom/gnwt-releases-budget-2025-2026
[1] Applies to the first $500,000 of active taxable income of Canadian-Controlled Private Corporations (CCPCs).
