CRA effectively confirms that s. 119 does not provide relief from double taxation re non-TCP shares

S. 119 applies to the withholding tax on dividends on shares subject to the stop-loss rules in subsection 40(3.7) and provides a credit against the tax that was payable under s. 128.1(4) by virtue of the taxpayer’s departure from Canada. (See Shew.) CRA read the clear words of s. 119 and confirmed that, for it to apply, the shares (which were deemed to be disposed of) must have been taxable Canadian property continuously from the time of emigration.

Accordingly, double taxation can occur.

Neal Armstrong. Summary of 7 October 2016 APFF Roundtable, Q.18 under s. 119.