After noting that payments (“CERB Payments”) made pursuant to the Canada Emergency Response Benefit Act (the “CERB Act”) to a non-resident individual were required by ss. 56(1)(r)(iv.1) and 115(1)(a)(iii.22) to be included in computing the taxable income earned in Canada of the non-resident, CRA indicated that the “Other Income” Article of an applicable Treaty will generally apply to the payments and that, similarly to federal employment insurance compensation, it is CRA’s view that the CERB Payments constitute income arising in Canada, so that Canada generally has the right to tax CERB Payments without restriction.
CRA further noted:
Pursuant to the Elimination from Double Taxation Article of the relevant Treaty, the Non-Resident’s country of residence as determined under the Residence Article of the relevant Treaty will be required to provide relief from double taxation either in the form of a credit or of a deduction for the Canadian income taxes paid or accrued in respect of CERB Payments in accordance with the “Other Income” Article of the relevant Treaty.