Climate warming and permafrost thaw induced land cover change are well documented in much of the circumpolar north. The frequent exposure of Precambrian continental crust in Canada’s Taiga Shield ecoregion could mean impacts of land cover change documented in other regions without this feature are not transferable. These meteorological, eddy covariance, stable isotope, soil temperature and soil moisture data were used to examine energy partitioning, vegetation water use and soil water state in conifer stands of different canopy density in a Taiga Shield research watershed 5 km north of Yellowknife, NWT. The goal was to determine how changes to canopy density with climate warming could influence water budget response and soil water state. Paired measurements of sensible and latent heat imply evaporative processes in denser canopies are controlled more by radiative than the aerodynamic factors predominant in sparser canopies. As denser canopies become more prevalent on the landscape, the switch in relative importance of radiative or aerodynamic factors will lead to a reduction in inter-annual variability of evapotranspiration. The three dominant tree species (black spruce, tamarack and jack pine) are all quick to draw water after spring thaw and rainfall events and they tend to draw water from shallow soils. More of these trees leads to differences in stable isotope signatures of water that remains in the soil, with older, more evaporatively enriched water prevalent in soils below dense canopies. The land cover distribution in this landscape, dominated by lakes and exposed bedrock that restricts widespread expansion of forested land covers, and the insufficient difference between sparse and dense canopy ET suggest a fundamental change in how water cycles in Taiga Shield catchments is unlikely, which is notably different than previously investigated landscapes in Alaska and the Canadian Taiga Plains.