Northwest Territories (NWT) Business Tax Breaks & Incentives
A comprehensive directory and guide to all business tax credits, incentives, and grants available in the Northwest Territories. Learn how to claim, who qualifies, and how NWT businesses can maximize their savings.
Overview: Supporting Business Growth in the North
The Northwest Territories offers a unique landscape for business, with opportunities in mining, energy, tourism, transportation, and northern innovation. To support economic growth, create jobs, and encourage investment, the territorial and federal governments provide a range of tax credits, grants, and incentive programs tailored to the needs of northern entrepreneurs, small businesses, and larger enterprises.
This guide covers the main tax breaks and incentives for NWT businesses—whether you are starting up, expanding, investing in innovation, or supporting workforce development. We also provide links to related business incentive directories across Canada so you can explore stacking opportunities.
Directory of NWT Business Tax Credits & Incentives
- Small Business Deduction – NWT follows the federal Small Business Deduction, reducing the corporate tax rate on the first $500,000 of active business income for Canadian-controlled private corporations (CCPCs). Learn more.
- Mining and Exploration Incentives – Programs like the Mining Incentive Program (MIP) offer grants to prospectors and mineral exploration companies operating in the NWT. Official MIP info
- Innovation and Technology Support – The Department of Industry, Tourism and Investment provides various funds and supports for tech and innovation projects.
- Film & Media Tax Credits – The NWT Film Rebate Program provides rebates on local spend, travel, and training for eligible productions. More about NWT Film Rebate
- Federal Credits (SR&ED, Digital Media, Hiring, Apprenticeship) – NWT businesses may claim federal tax credits such as SR&ED (R&D), the Digital Media Tax Credit, and hiring/apprenticeship incentives. Canada-wide credits
- Export and Market Development Grants – Various programs support NWT businesses seeking to reach new markets outside the territory.
- Green/Energy Efficiency Incentives – Rebates, grants, and federal credits are available for green upgrades, energy efficiency, and clean tech adoption. See green tech credits
Quick Links to Other Jurisdictions
Eligibility & How to Claim
Who can claim NWT business credits? Most incentives are aimed at incorporated businesses (CCPCs), partnerships, and in some cases, sole proprietors who operate and pay tax in the Northwest Territories. Certain grants are available to startups and non-profits as well.
- Small Business Deduction: Must be a CCPC earning active business income in NWT. Claim on your T2 corporate tax return (federal/territorial schedule).
- Mining Incentive Program: Submit a proposal and budget to the Department of Industry, Tourism and Investment. If approved, you will receive a grant/rebate for eligible expenses. Keep detailed receipts and exploration records.
- Film & Media: Apply before and after production, providing budgets and proof of NWT spend. Rebates are paid out after audit.
- Federal Credits (e.g., SR&ED): Claim via your federal T2 return, with detailed technical and financial documentation. NWT does not have its own SR&ED credit, but you can benefit fully from the federal program.
For each credit or grant, consult the official program guidelines and ensure you retain all invoices, contracts, payroll records, and relevant documentation for audit purposes.
Calculation Example: Small Business Deduction
If your NWT-based CCPC earns $400,000 in active business income, you may claim the Small Business Deduction on this amount. The combined federal and NWT small business tax rates (2024) are substantially lower than the general rate, resulting in significant savings. For instance, you may pay about 11% total tax on the first $500,000, compared to 26-27% at the general rate.
Always consult a professional for the latest rates and any NWT-specific rules.
Stacking with Federal Credits
NWT businesses can generally stack territorial incentives with federal tax credits. For example, you may claim the Mining Incentive Program grant, then also claim eligible exploration expenses under the federal Mineral Exploration Tax Credit. Similarly, use the Small Business Deduction and claim the SR&ED credit for qualifying R&D expenses in the territory.
- Check for specific stacking restrictions in each program’s guidelines.
- Disclose all grants and assistance received when claiming federal credits.
Practical Scenario
Example: A mining startup in Yellowknife receives a $50,000 grant from the NWT Mining Incentive Program to fund early-stage exploration. In the same year, it claims the federal Mineral Exploration Tax Credit for eligible expenses, and applies the Small Business Deduction to reduce its corporate tax rate. By combining (stacking) these supports, the company substantially lowers its net costs and tax bill—maximizing its chance of success.
Documentation & Best Practices
- Maintain clear, organized records of all expenditures, payroll, contracts, and grant correspondence.
- Retain technical reports and proof of NWT activities for at least six years in case of audit.
- Review claim forms for accuracy and completeness before submitting.