With higher deductions, plus travel allowances many residents are better off than their southern relatives. The lack of a provincial sales tax helps dollars go a lot further.
While it is true that the cost of shelter and food are higher here in the Northwest Territories, according to Statistics Canada most other family expenses are the same or lower. The actual dollar differences are approximately $4000 to $7000 per year depending on what province you live in.
According to 2010 figures, families are likely to have more discretionary income if they live and work in the NWT. Statistics Canada reported that the NWT median family income was 35 percent higher than Quebec, 30 percent higher than Ontario and 16 percent higher than Alberta. That can translate into a mortgage on a first home and a quality lifestyle.
You also get serious financial breaks – from both the territorial and federal governments – should you decide to join us here in the Northwest Territories. Benefits can vary depending upon the sector you are employed in and your employer, but are usually quite generous.
Northwest Territories residents enjoy some of the lowest personal income tax rates in Canada. We are regularly taxed at a rate lower than the national average across all income levels. In addition to the federal tax, in 2015, Territorial Personal Income Tax Rates were as follows:
Territorial Personal Income Tax Rates
$40,484 or less: 5.9%
Over $131,641: 14.05%
Detailed information about Territorial personal Income Tax rates and structures can be found here.
Other tax benefits include the NWT Cost of Living Tax Credit, and non-refundable tax credits including Basic Claim Amounts of $13,900. You can find detailed information about personal income tax rates and specific tax incentives for NWT residents such as the Cost of Living Tax Credit, at the GNWT’s Finance site.
That’s right: no PST or HST in the NWT. You are still subject to the federal GST (5 per cent), but that compares pretty favorably to Ontario’s combined rate of 13 per cent, or British Columbia’s 12 per cent.
Many NWT-based employers provide travel allowances to their employees. The costs of some trips south are tax deductible as part of the northern living allowance. Medical travel expenses are also deductable.
Living in the NWT makes you eligible for the Federal Northern Residents Deduction (max. $6,022 for the basic deduction, plus possible travel deductions). Visit the Canada Revenue Agency to find out more details.