On February 8, 2023, the Honourable Caroline Wawzonek, Minister of Finance, presented the 2023–2024 Northwest Territories budget. This budget aims to develop a sustainable foundation while supporting the economy and investing in communities, healthcare, early childhood education, climate change initiatives, and labour skills development and training.
This year’s budget did not contain any new taxes. However, the Minister announced a few tax increases, as outlined below.
Carbon Pricing
The budget noted that legislation was introduced in October 2022 to increase carbon tax rates to $65 per carbon-equivalent tonne of greenhouse gas emissions, effective April 1, 2023. Under this plan, the rates will increase annually by $15 per carbon-equivalent tonne until April 1, 2030, when rates will reach $170 per carbon-equivalent tonne. However, aviation fuel and diesel fuel used to generate community-distributed electricity will continue to be exempt from carbon tax.
Proposals to help reduce the added burden of the carbon tax, including increases to cost of living offset amounts and spending to assist individuals and businesses in reducing their carbon-based fuel consumption, are also included in this year’s budget. However, these measures are conditional on the government passing its proposed legislation to implement the annual carbon tax rate increases. If the legislation is not passed, the federal carbon tax (i.e., fuel charge) will take effect in the territory on April 1, 2023, with the revenues generated distributed through federal programs.
Property Taxes
Consistent with previous years, property tax rates will be increased based on inflation rates. The indexing of property tax rates and other fees is intended to ensure tax increases do not create a disincentive to economic growth and diversity.
More Information
Further information on the 2023–2024 Northwest Territories budget is available on the government’s website at:
https://www.fin.gov.nt.ca/en/services/budget-2023
To read key updates from Canada’s 2023 provincial budgets, please navigate to Key Changes | 2023 Canadian Federal and Provincial Budgets.
If you have any questions about how these proposed changes might impact your organization, please do not hesitate to contact the Ryan TaxDirect® line at 1.800.667.1600 or taxdirect@ryan.com.
- Topics
- Property Tax