CRA finds that a non-resident airline with no Canadian PE is required to withhold from the remuneration of its non-resident employees unless a Reg. 102 waiver is obtained

The exemption under s. 81(1)(c) for income of a non-resident (here, a U.K. resident) from income earned in Canada from the operation of an aircraft in international traffic is available (assuming its home jurisdiction provides reciprocal relief) even if it is earning that income by lending out its aircraft and crew to a Canadian airline (so that it does not receive ticket revenues from the passengers.)  Its U.K. employees generally would be Treaty-exempt on their remuneration (as they would not be present in Canada for more than 183 days in any 12-month period and their U.K. employer would not have a Canadian permanent establishment) - but according to CRA, this would not eliminate the requirement for Reg. 102 withholding from their remuneration unless a waiver is obtained.

This is starting to engage the Exida.com principle ("the obligation to file could only extend to those that had some connection with Canada,") and the presumption against extra-territoriality (Society of Composers).

Neal Armstrong.  Summaries of 16 June 2014 T.I. 2013-0515431E5 under s. 81(1)(c), s. 115(3), Treaties – Art. 15, and Reg. 102.