CRA indicates that a s. 15(1)-relevant s. 246(1)(a) benefit generally will not subject a non-resident to Part I tax

In the case of a non-resident indirectly receiving a benefit, the focus usually is more on the potential imposition of Part XIII tax under s. 246(1)(b) than of Part I tax under s. 246(1)(a).

When asked about the latter provision, CRA indicated that generally a non-resident’s Part I tax liability, including from any s. 246(1)(a) benefit, is based on the non-resident’s taxable income earned in Canada under s. 2(3) and Division D (ss. 115-116). To the extent that only s. 15(1) is relevant in the analysis of the s. 246(1)(a) benefit being conferred, such a benefit generally would not be considered taxable income earned in Canada, as it would generally not be included under s. 2(3) (which references only employment in Canada, carrying on business in Canada and dispositions of taxable Canadian property) or Division D.

CRA went on to indicate that even if the benefit amount were not taxable income earned in Canada, it could still be relevant for certain purposes in computing the non-resident’s income as provided in s. 250.1(1)(b).

Neal Armstrong. Summary of 15 May 2019 IFA Roundtable, Q.7 under s. 246(1)(a).