The relationship between groundwater and discharge in Arctic and sub-Arctic regions is strongly controlled by permafrost. Previous work has shown that catchments with thawing frozen soils due to the warming climate are expected to show changes in their storage-discharge relationship. In this study, we use a mechanistic modelling approach to demonstrate that a thawing catchment underlain with continuous permafrost undergoes a dramatic change in storage-discharge relationship. We demonstrate that the effect of permafrost thaw, conceptualized as a reduction of an impermeable layer in the subsurface, will likely only be clearly observable as a change in slope of the recession curve of catchments with hillslope gradients>5 %. For flat catchments (<1% hillslope gradient), we find no relation with permafrost extent and change in recession curve slope will likely be dominated by changes in active layer parameters, such as in shallow surface permeability (Hydraulic Conductivity, above permafrost) and shallow surface and subsurface water retention (Specific Yield of Groundwater & Specific Yield of Surface). For mildly sloped Arctic catchments (5 % hillslope gradient), change in recession curve slope is controlled both by changes in permafrost extent and the subsurface flow length and subsurface hydraulic properties for the shallow flow, with minimal impact from overland flow properties and changes in meteorological factors. For moderately sloped Arctic catchments (10 % hillslope gradient), change in recession curve slope change is dominated by changes in permafrost extent, and secondly by changes in the subsurface flow length and subsurface hydraulic properties, with no impact from meteorological factors or changes in overland flow properties. Several of the parameters found to be driving shifts in recession curve slopes in our modeling, such as changes in active layer thickness and the formation of taliks, are more likely than others to evolve with the ongoing Arctic climate change in hillslopes, helping us understand what drives the real-world increases in non-linearity of storage-discharge relationships.