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Taxes and Royalties

Payments to public governments
Besides the value of income tax generated from mine workers, under the GNWT/federal government Devolution Agreement, the GNWT also benefits from direct mine company taxation, as well as resource royalties. Resource royalties are paid to the territorial government by mining companies and are profit based. This is in addition to the many other taxes paid, personal income and payroll taxes, fuel and property taxes, and bridge tolls. Other significant tax payments are difficult to find in the public domain and thus are not included.

Fuel and property taxes
Mines in the NWT pay taxes to the GNWT on fuel consumed at the mine sites, and they pay property taxes assessed on the value of their mine site assets. Since 2000, the mines have collectively paid approximately $115 million in fuel taxes and approximately $230 million in property taxes. The three operating diamond mines are projected to pay similar amounts to the end of their expected mine lives.

NWT and Nunavut are the only Canadian jurisdictions that levy property taxes at significant levels. Mines in similar areas (remote hinterland) in provinces would not pay property taxes. Furthermore, the GNWT applies a fuel tax on off-road fuel consumption which mines do not pay in other jurisdictions. Source: Northwest Territories Revenue Option, February 2016

Diamond royalties shared with Indigenous groups
Under the terms of the Gwich’in, Sahtu and Tlicho land claim agreements, each of these groups negotiated a share of royalties generated by non-renewable resource industries in the Northwest Territories. Through 2016, over $40 million of diamond royalties have been shared with the three Indigenous groups.

Additionally, under Devolution, resource royalties are shared equally by the two governments. The GNWT has committed to share one quarter of the 50 percent net fiscal benefit with the nine Indigenous signatories to the agreement. In its Communities and Diamonds 2016 Annual Report, the GNWT reports the 12.5 percent shared with indigenous governments cumulatively totals $12.5 million. Further resource revenue allocation details are included in the GNWT Communities and Diamonds 2016 Annual Report.