CRA indicates that the Treaty Other-Income Articles generally accord Canada the full right to impose Part I tax on CERB payments made to a resident of the other Treaty country

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 that pursuant to the non-Double-Taxation Article of the relevant Treaty, the non-resident’s country of residence “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”.

Neal Armstrong. Summaries of 9 July 2021 Internal T.I. 2021-0893981I7 under s. 120(1) and Treaties – Income Tax Conventions – Art. 15, Art. 24.