CRA finds that the Treaty exclusion for participating interest applies to oil-index linked interest paid by a Canadian oil exploration company to a U.S. resident even though it owns no oil

Although interest paid paid by a Canadian resident to a U.S. resident normally is exempt from withholding tax, Art. XI, para. 6(b) of the Treaty provides that the exemption does not apply where the interest "is determined with reference to…any change in the value of any property of the debtor."  CRA has found that this exclusion applies to interest paid by a Canadian exploration company with valuable oil and gas properties, where the interest is computed by reference to a public index tracking the price of oil and gas, even though it does not have any oil or gas inventory.

Neal Armstrong.  Summary of 26 August 2013 Memorandum 2013-0494211I7 under Treaties – Art. 11.