CRA confirms that U.S.-dollar dividends are translated on a cash rather than accrual basis

Even before 2012, CRA's position was that, in the case of regular (cf., deemed) dividends, in order for an eligible dividend designation to be valid, it must stipulate the (dollar) amount of the dividend (2010-0373281C6), and this is even clearer following an amendment, effective for dividends paid after March 28, 2012, to permit designation of part of a dividend as an eligible dividend (see 2013-0512041E5 F).

Citing Banner Pharmacaps, CRA considers that a dividend does not “arise” for s. 261(2) purposes until it is paid (rather than declared) so that its amount, including for eligible dividend designation purposes, is translated using the spot rate on the payment date.

Neal Armstrong. Summary of 20 November 2014-0539951E5 under s. 261(2).