globaltaxnews.ey.comSign up for tax alert emailsPrintDownload

24 February 2022

Canada: Northwest Territories issues budget 2022/23

Executive summary

On 22 February 2022, Northwest Territories Finance Minister Caroline Wawzonek tabled the territory’s fiscal 2022/23 budget. The budget contains no new taxes and no income tax increases.

The Minister anticipates an operating surplus of $28 million1 for 2021–22 and projects operating surpluses of $131 million for 2022/23, $171 million for 2023–24, and declining surpluses for each of the next two years.

The following is a brief summary of the key tax measures.

Detailed discussion

Business tax measures

Corporate income tax rates

No changes are proposed to the corporate income tax rates or the $500,000 small-business limit.

The Northwest Territories 2022 corporate income tax rates are summarized in Table A.

Table A – 2022 Northwest Territories (NWT) corporate income tax rates*

 

2022

NWT

Federal and
NWT combined

Small-business tax rate**

2%

11%

General corporate tax rate**

11.50%

26.50%

* The rates represent calendar year-end rates.

** The federal budget proposed to temporarily reduce the federal corporate income tax rate for qualifying zero-emission technology manufacturers by 50% (i.e., to 7.5% for eligible income otherwise subject to the 15% general corporate income tax rate or 4.5% for eligible income otherwise subject to the 9% small-business corporate income tax rate), applicable for taxation years beginning after 2021. The reduced tax rates are proposed to be gradually phased out for taxation years beginning in 2029 and fully phased out for taxation years beginning after 2031.

Personal tax

Personal income tax rates

The budget does not include any changes to personal income tax rates.

The 2022 Northwest Territories personal income tax rates are summarized in Table B.

Table B – 2022 Northwest Territories personal income tax rates

First bracket rate

Second bracket rate

Third bracket rate

Fourth bracket rate

$0 to $45,462

$45,463 to $90,927

$90,928 to $147,826

Above $147,826

5.90%

8.60%

12.20%

14.05%

*For taxable income in excess of $147,826, the 2022 combined federal-Northwest Territories personal income tax rates are outlined in Table C.

Table C – Combined 2022 federal and Northwest Territories personal income tax rates

Bracket

Ordinary income*

Eligible dividends

Non-eligible dividends

$147,827 to $155,625

40.05%

18.67%

28.77%

$155,626 to $221,708**

43.43%

23.34%

32.66%

Above $221,708

47.05%

28.33%

36.82%

*The rate on capital gains is one-half the ordinary income tax rate.

** The federal basic personal amount comprises two elements: the base amount ($12,719 for 2022) and an additional amount ($1,679 for 2022). The additional amount is reduced for individuals with net income in excess of $155,625 and is fully eliminated for individuals with net income in excess of $221,708. Consequently, the additional amount is clawed back on net income in excess of $155,625 until the additional tax credit of $252 is eliminated; this results in additional federal income tax (e.g., 0.38% on ordinary income) on net income between $155,626 and $221,708.

Other tax measures

Property tax

In keeping with the existing indexation policy, property mill rates will be adjusted for inflation.

Carbon pricing

Given the upcoming federally mandated carbon tax rate increase to $50 per carbon-equivalent tonne of greenhouse gas emissions effective 1 July 2022, the budget proposes to increase the Northwest Territories cost of living offset benefit to $260 per year for an individual and to $300 per year for a child, effective 1 July 2022.

_________________________________________

For additional information with respect to this Alert, please contact the following:

Ernst & Young LLP (Canada), Toronto

Ernst & Young LLP (Canada), Quebec and Atlantic Canada

Ernst & Young LLP (Canada), Prairies

Ernst & Young LLP (Canada), Vancouver

_________________________________________

Endnotes

  1. Currency references in this Alert are to the CA$.

Document ID: 2022-5203

 
 

The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.

 

Copyright © 2025, Ernst & Young LLP.

 

All rights reserved. No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Ernst & Young LLP.

 

Any U.S. tax advice contained herein was not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.

 

"EY" refers to the global organisation, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.

 

Privacy  |  Cookies  |  BCR  |  Legal  |  Global Code of Conduct Opt out of all email from EY Global Limited.

 


Cookie Settings

This site uses cookies to provide you with a personalized browsing experience and allows us to understand more about you. More information on the cookies we use can be found here. By clicking 'Yes, I accept' you agree and consent to our use of cookies. More information on what these cookies are and how we use them, including how you can manage them, is outlined in our Privacy Notice. Please note that your decision to decline the use of cookies is limited to this site only, and not in relation to other EY sites or ey.com. Please refer to the privacy notice/policy on these sites for more information.


Yes, I accept         Find out more