Politicians are lining up to say northerners need help meeting their costs as the latest GDP figures show the NWT’s economy has been the worst-performing in Canada. But what any help will look like isn’t clear.
Finalized 2025 figures from Statistics Canada show the NWT’s economy contracted by 1.9 percent that year, a drop driven by the collapsing diamond industry. That sector’s decline has continued into 2026 and appears terminal.
Every other provincial and territorial economy in Canada grew. The final NWT figure is broadly in line with initial estimates for 2025 released in May.
While major federal investment is promised on multiple fronts – highways and defence spending being two, worth billions of dollars each – the effects may not be felt for years.
That leaves the NWT without any real economic driver in the meantime, as fuel costs spike. In turn, rising transportation costs are affecting the price of food.
Advertisement.
Advertisement.
In the territorial legislature this week, regular MLAs Kieron Testart and Robert Hawkins introduced a bill that would suspend territorial fuel taxes for a year.
That suspension would have no effect on heating costs, as heating fuel is not taxed, but the MLAs said it would save about $15 million.
The two MLAs failed in a bid to fast-track the bill, however. Even if it gets enough backing to pass and meets legislative criteria, it is months away – at least – from becoming law.
NWT finance minister Caroline Wawzonek said she wasn’t sure “how much relief would actually reach residents and businesses” through such a bill, though she acknowledged it would save someone about $8.56 on an 80-litre tank of gasoline in Yellowknife.
Advertisement.
Advertisement.
Hawkins said the minister “should not be so quick to discount” that kind of saving, as it would add up, but Wawzonek said she believes there are more effective approaches – and also argued the GNWT, already expecting a deficit, does not have $15 million to lose without making cuts elsewhere.
Possible subsidy
Speaking to Cabin Radio on Friday, the finance minister said the GNWT is working on measures it can roll out to help people. She appeared to suggest help with heating costs may be coming.
“What we’re looking at is what kind of subsidy we could do. Heating fuel is a tricky one. Some people use diesel. Some are on propane. Some are on natural gas. Some are on wood biomass, some are on wood. So it’s tricky to figure out what we can do,” she said.
“How do we target those who most need it? How do we target which fuel source? Is it done at a purchasing stage? Is it direct to residents? We are looking to bring something out quickly.”
Wawzonek said the territory is in the position of needing to look at this kind of subsidy because there was nothing in the federal budget to help.
“I have very mixed, extreme emotions” about that budget, she said, given it also fully funded the proposed Mackenzie Valley Highway, an ask the NWT has made for decades.
“I was looking and waiting to see what was going to happen with respect to affordability measures and supports for residents, because all of Canada is seeing challenges,” Wawzonek told Cabin Radio.
“In terms of fuel, I was hoping to see a little more in the federal budget. Obviously, we have not.”
Advertisement.
Advertisement.
Grocery benefit thresholds
The federal government says it is expanding its Canada Groceries and Essentials Benefit, a quarterly tax-free payment, to try to help.
“This past year, it was up to just over $1,800” per year, NWT MP and Crown-Indigenous relations minister Rebecca Alty told Cabin Radio on Friday morning. “Next year, it’ll be $2,500 for a family of four.”
Alty also pointed to Nutrition North. Federal top-up payments to that program are doubling, though exactly how that will be passed on to northerners has yet to be set out.
Wawzonek was not convinced the groceries benefit would provide a solution, noting it relies on an income threshold that might not make sense in the North, depending on how Ottawa applies it.
“I’ve asked our department to look at how many northerners get access to that grocery benefit,” she said.
“I’m concerned that the thresholds for eligibility don’t match up to the realities of the North.”
Alty said she would need to more closely study those thresholds before commenting.
