CRA indicates that a Canadian corporation with a USD functional currency can be subject to Part XIII withholding obligations on its USD prefs resulting from FX fluctuations

CRA considers that a Canadian corporation which has the U.S. dollar as its elected functional currency nonetheless is required to keep track of the paid-up capital of its shares, so that if it issued U.S.$100,000 of shares when the Canadian dollar was at par and redeemed those shares when their Canadian-dollar equivalent was $125,000, there would be a resulting deemed dividend to its shareholder (unless the shareholder was a Canadian corporation that also had the U.S. dollar as its functional currency for the relevant period.) However, there would be no Part VI.1 tax, as that would relate to the tax results of the corporation rather than its shareholder.

Neal Armstrong. Summary of 26 May 2016 IFA Roundtable, Q. 3 under s. 84(3).