Article 18

Regarding the Canadian withholding tax rate applicable to lump sum payments from a Canadian registered retirement savings plan (“RRSP”) to a resident of New Zealand, the questioner noted that IC76-12R6 as it then read stated, in Appendix C, that a lump sum RRSP payment to a resident of New Zealand was subject to a 15% Canadian withholding tax. CRA noted that the Circular had since been updated on June 21, 2021 to reflect that under the current New Zealand-Canada Treaty that became effective on August 1, 2015, the reduced 15% Canadian withholding tax rate under Art. 17 only applies to periodic pension payments, and that lump sum RRSP payments to a resident of New Zealand are subject to Canadian withholding tax at the rate of 25% under s. 212(1)(l).

S. 56(1)(a) generally requires the recognition of an amount received as or in satisfaction of a pension benefit. A portion of a multi-employer US defined benefit pension plan (a qualified plan under IRC s. 401(a)) was held for the benefit of Canadian-resident participants. CRA ruled that a transfer of a portion of the assets in this plan to a new plan (also qualifying under IRC s. 401(a)) established for the benefit of a portion of the beneficiaries of the old plan, including some of the Canadian beneficiaries, so that they ceased to be participants in the old plan, did not trigger any income inclusion under s. 56(1)(a).

The CRA tags also mentioned Art. XVIII of the Canada-US Treaty, which effectively seems to indicate that even if the amounts transferred directly between the old and new plan were somehow regarded as pensions paid to the Canadian beneficiaries, they would not be subject to Canadian tax if they would not have been subject to US tax if such beneficiaries had been US residents (such transfers indeed were exempt under the Code).

Would the receipt by a Canadian resident of a military service pension and a military disability pension from the Ministry of Defence of the Government of India be taxable? CRA stated:

[T]he total amount of the Indian military service pension and the Indian military disability pension (inclusive of the inflation adjustment amounts) received in the tax year by the Canadian resident individual would be included in the individual’s income under the Act as pension income but would be exempt from taxation in Canada under Article 18 of the Canada-India Tax Agreement.

Upon retirement, Ms. X, who was the sole member of an individual pension plan (“IPP”), started receiving monthly retirement benefits, subject to a 10-year guarantee. She died during the guarantee period, so that the monthly benefits were payable for the remainder of the guarantee period to her daughter, a U.S. resident. At the end of the guarantee period, the IPP will be wound up and the remaining funds distributed to the daughter.

After noting that although the term “periodic pension payment” is not defined in the Canada-U.S. Treaty, s. 5 of the Income Tax Conventions Interpretation Act “expressly excludes a lump sum payment,” CRA rejected the submission that the “final distribution payment to the daughter is simply an extension of the periodic guarantee payments that the daughter was receiving and thus should be eligible for the reduced withholding tax rate under the Treaty” (so that the non-Treaty reduced rate of 25% applied) stating:

[T]he final distribution payment is a lump sum payment of an actuarial surplus that relates to the IPP, which is a permissible distribution pursuant to [Reg.] 8502(d)(vi) … .

CRA went on to gratuitously state:

[A]ny additional payment that an IPP may be required to make in a particular year to comply with the IPP minimum amount rules in [Reg.] 8503(26) … is not considered to be a periodic pension payment. … Whether an IPP must make such a payment has to be determined each and every year by reference to the current value of the IPP’s assets and an age-based factor. …

Similarly, a commutation payment made to a member or a beneficiary of a member in full or partial satisfaction of their entitlement to benefits under a defined benefit RPP is not a periodic pension payment.

Art. 18(2)(a) of the Canada-Swiss Treaty provides that “pensions paid by, or out of funds created by, Switzerland or a political subdivision or a local authority thereof to any individual in respect of services rendered to Switzerland or subdivision or local authority thereof in the discharge of functions of a governmental nature shall be taxable only in Switzerland.” Would an annuity received post-retirement as a result of having worked as a nurse at a Swiss public hospital (as well as pension benefits (the “OAS”) received from a Swiss canton that were provided by it to enable seniors to meet their basic needs) be exempted? CRA responded:

"[S]ervices rendered to Switzerland" refers to services rendered in the course of functions of a public character. The executive, legislative and judicial functions of a State constitute such functions, including the identification, development and implementation of government policies. …

[T]he exercise by a person of duties as a nurse within the Swiss healthcare sector, which is essentially dedicated to the provision of services for the benefit of the community as a whole, does not generally [so] qualify… . Thus, the deduction under subparagraph 110(1)(f)(i) could not be claimed by such a person… .

How does Art. 18 of the Canada-Turkey Treaty (the “Convention”) apply to a payment arising in Canada and paid to a resident of Turkey under:

1. an annuity contract described in s. 12.2;
2. an annuity contract described in s. 56(1)(d); or
3. a contract described in para. (a) of the definition of "retirement savings plan" under s. 146(1) (an "Annuity-Type RRSP")?

CRA responded:

Q.1

Since there is no deduction available for the cost of any annuity in the case of an annuity referred to in section 12.2… the payment made under this type of contract is not excluded from the definition of "annuities" in Article 18, paragraph 5… . The rate reduction provided for in Article 18, paragraph 3… therefore could apply.

Q.2

While some might argue [having regard to the exclusion from “annuity” in Art. 18, para. 5 of “any annuity the cost of which was deductible”] that the deduction under paragraph 60(a) is a deduction of a portion of the cost of the annuity, the cost is not deductible when the contract is acquired. The deduction under paragraph 60(a) contemplates the exclusion from income of the portion of the particular payment that represents capital. …

…[T]his type of deduction would not be covered by any of the exceptions set out in the definition of "annuities" in Article 18, paragraph 5… .. An annuity payment referred to in paragraph 56(1)(d) would, in our view, be an annuity within the meaning of the Convention and the reduction in the Canadian tax rate provided for in paragraph 3 of Article 18 of the Convention would be applicable in such a case.

Q.3

Since premiums paid by a taxpayer to an Annuity-Type RRSP are generally deductible in computing income…this type of contract will not constitute an annuity within the meaning of paragraph 5 of Article 18 of the Convention, and paragraph 3 of Article 18 will not apply.

…[A] payment made under an Annuity-Type RRSP…is included in the definition of "pension" in subparagraph (a)(ii) of section 5 of the [Income Tax Conventions] Interpretation Act.

Finally, the payment of an annuity from the maturity of an Annuity-Type RRSP is a "periodic pension payment" since it is not covered by any of the exceptions listed in paragraphs (a) to (d) of the definition of the expression under section 5 of the Interpretation Act. The reduced rate determined under paragraph 2 of Article 18 of the Convention should therefore apply.

A U.S. citizen is resident in Canada and was the beneficiary of a deceased U.S resident who had been a retired member of a U.S. public pension plan. A payment received under the plan by the beneficiary would be of a “superannuation or pension benefit” (includible in income under s. 56(1)(a)(i)) rather than of a “death benefit” (generally includible under s. 56(1)(a)(iii) but subject to a $10,000 exclusion from income). CRA went on to indicate:

Pursuant to paragraph 1 of Article XVIII of the [Canada-U.S.] Treaty, the amount of the pension taxable in Canada is reduced by the amount that would be excluded from taxable income in the U.S. if the recipient were a resident thereof. To the extent that the amount received by the beneficiary of the decedent would be excluded from taxable income in the U.S. had the recipient been a resident thereof, for example as a consequence of the deduction allowed under section 691(c)(1) of the U.S. Internal Revenue Code (footnote 1 [Section 691(c)(1) provides that a person who includes an amount of income in respect of a decedent (“IRD”) in gross income under § 691(a) is allowed as a deduction, for the same taxable year, a portion of the estate tax paid by reason of the inclusion of that IRD in the decedent’s gross estate]), such excluded amount would not be taxable in Canada and may be deducted by the Canadian resident taxpayer in computing his taxable income in accordance with subparagraph 110(1)(f)(i).

…As the taxpayer is a U.S. citizen, [a foreign tax] credit in respect of the U.S. federal and state taxes should be computed in accordance with the rules of subparagraph 4(a) of XXIV of the Treaty. Any portion of U.S. federal and state tax paid that is refundable to the taxpayer as a result of the provisions of subparagraph (4)(b) of Article XXIV is not creditable under subsection 126(1).

How is the tax treatment of RRSP payments (either periodic or in a lump-sum) or RRIF payments made to non-residents in New Zealand affected by the new Canada-New Zealand Treaty? CRA stated:

It should be noted that under the definition of "periodic pension payment" in section 5 of the [Income Tax Conventions Interpretation Act], neither a payment from an RRSP before maturity or in full or partial commutation of the retirement income under an RRSP (such as a a fixed or single lump-sum payment from your RRSP annuity that is equal to the current value of all or part of your future annuity payments from the plan), or a payment from a RRIF that exceeds either twice the minimum payment or the 10% threshold, is considered to be a "periodic pension payment". …[eligible for the15% reduced rate].

In addition, since the Current Treaty and the New Treaty have pension and annuity provisions, then the pension provision, as the more specific provision, is considered to apply and, by extension, a periodic pension payment would not be considered to be an annuity.

A Canadian resident employee, after qualifying for benefits under the unfunded long term disability plan ("LTD Plan") of the Canadian resident employer, becomes a resident of the U.S. Under the terms of the Plan, the employee is not required to fulfill any duties of employment and will continue to receive benefits until the earlier of rehabilitation and commencement of benefits under the employer pension plan. Would Part XIII withholding apply? CRA stated:

[T]he LTD Plan payments would be salary, wages or other remuneration…because they would be amounts arising out of the employment relationship. … As such… withholdings under Part XIII would not be applicable… [and] the LTD Plan payments would be subject to withholding under paragraph 153(1)(a)… .

While the LTD plan payments would be taxable as income from employment for purposes of the Act, such income would be considered as being pension income for the purposes of applying the provisions of the Convention. This is due to the fact that paragraph 3 of Article XVIII (Pensions and Annuities) of the Convention defines the term "pensions" as including any payment under a sickness, accident or disability plan (i.e., the LTD Plan). Consequently, one must refer to the provisions of Article XVIII of the Convention rather than those of Article XV (Income from Employment)… .[A] U.S. resident employee receiving LTD Plan payments could file a Canadian income tax return in order to obtain a refund of any withholdings made in excess of the 15% amount specified in paragraph 2 of Article XVIII… .

As "pension" was not defined in the Canada-Poland Treaty, s. 5(a) of the Income Tax Conventions Interpretation Act applied, so that all of the RPP, RRSP, OAS, CPP and QPP payments made to the Taxpayer (a former Canadian who became a Polish resident) were to be considered "pensions" for the purposes of the Treaty. In light of the definition of "periodic pension payments" in . 5(a):

a payment from an RRSP before maturity or in full or partial commutation of the retirement income under an RRSP…is not considered to be a "periodic pension payment" [and] such a payment to the Taxpayer would not be eligible for a reduced rate of withholding tax under the Treaty… .

Although income earned in a UK Cash ISA is not subject to taxation in the U.K., under the Canadian Income Tax Act ("Act") Canadian residents ... must report their worldwide income, including income earned on investments held in the U.K., for Canadian tax purposes. As such, the interest received or receivable in the year from the investments in a UK Cash ISA must be included in a Canadian resident's income tax return pursuant to paragraph 12(1)(c) of the Act.

CRA also indicated that neither Article 11 nor Article 17 of the Canada-UK Convention would apply to relieve taxation. (Article 17 is equivalent to Art. XVIII of the Canada-US Convention.)

A Roth IRA is not a registered plan under the ITA, but Article XVIII will generally apply to distributions to a Canadian resident individual out of a Roth IRA if the distribution would be excluded from income tax if paid to a US resident.

Under paragraph 7 of Article XVIII, a Canadian resident individual may also elect to defer taxation in Canada on any income accrued in a Roth IRA until a distribution is made from the plan.

Respecting the payment of a Belgian pension to a Canadian resident, CRA stated (TaxInterpretations translation):

Thus, to the extent that the retirement pension of a recipient satisfies the conditions stated in paragraph 1 of Article 18 of the Convention and does not constitute a payment by virtue of social security legislation of Belgium, the sum received by the Canadian taxpayer is taxable in Canada and in Belgium. A credit for Belgian taxes paid on that amount could, however, be claimed in the taxpayer's Canadian income tax return under subsection 126(1). If, on the other hand, the sum is paid under social security legislation of Belgium, it will not be taxable except in Belgium. The payment will be required to be included in the income statement of the Canadian taxpayer, but the taxpayer will benefit from a deduction in an equivalent amount under subparagraph 110(1)(f)(i).

Discussion of treatment of German social security pensions including link to discussion at www.cra-arc.gc.ca/tx/nnrsdnts/ntcs/grmny2005-eng.html. CRA states:

a recipient of a qualifying retroactive lump-sum payment exceeding $3,000 can ask the CRA to tax the parts (not including interest) received as a lump-sum payment as if they had received them in the years to which they relate using Form T1198, Statement of Qualifying Retroactive Lump-Sum Payment. The CRA will apply this calculation to the parts that relate to years throughout which the taxpayer was resident in Canada, if the total of those parts is $3,000 or more (not including interest) and the result is better for the taxpayer.

An individual who converts a traditional US Individual Retirement Account ("IRA") to a Roth IRA is allowed under the Code to spread the resulting income inclusion over the following two taxation years.

CRA confirmed that there is no such allowance under Canadian tax law, and the entire converted amount is treated as a distribution from the IRA and will be included in the year of the conversion, pursuant to s. 56(1)(a)(i)(C.1). CRA stated:

Pursuant to paragraph 1 of Article XVIII of the Convention, amounts received from a traditional IRA by a Canadian resident may be taxed in Canada. However, as an exception, amounts that would be exempt from taxation in the U.S. if paid to a U.S. resident may not be taxed in Canada. In the case at hand, the 2010 conversion amount is not exempt from taxation in the U.S., as the taxation of this amount is simply being deferred. Consequently, the Convention does not apply to prevent the 2010 conversion amount from being taxed in Canada.

CRA noted, however, that "in many cases, Article XVIII of the Convention may apply to either defer or relieve taxation in Canada." Income Tax Technical News, No. 43 describes CRA's position on Roth IRAs in more detail.

It is unnecessary for a Canadian-resident individual to file an election under Art. XVIII(7) of the Canada-US Convention to defer recognition of income on investments in a US Individual Retirement Account because the Act already provides such deferral:

Under clause 56(1)(a)(i)(C.1) of the Act, an individual is required to include amounts under a foreign retirement arrangement in income only when the amounts are paid out of the plan.

(These remarks apply only to IRAs that are foreign retirement arrangements. For the treatment of a Roth IRA, see Income Tax Technical News, No. 43.)

A 401(k) plan is considered a qualifying retirement plan as defined in Art. XVIII, para. 15 of the Canada-US Convention. General discussion of how the Canadian RRSP rules are applied to a Canadian resident performing services for a US-resident employer, with the other requirements of Art. XVIII, para. 15 being satisfied.

After noting that a Canadian resident receiving an old age pension from Switzerland could not avail of the exclusion in s. 56(1)(a)(i)(C.1) given the narrow scope of Reg.6803, CRA went on to note the exclusion for certain pensions (e.g., re Swiss government or military personnel, or alimony) in Art. 18(2) of the treaty with Switzerland.

The taxpayer was resident in Canada when ordered by a divorce decree to pay a monthly support to his ex-spouse for the exclusive benefit of their minor child (which was included in her income), but then ceased to be a resident in Canada. The taxpayer argued that he could deduct the amounts paid by virtue of Art. 18 of the applicable Convention, which provided:

"[A]limony and other similar payments arising in a Contracting State [e.g. Canada] and paid to a resident of the other Contracting State [e.g., XXXXXXXXXX] who is subject to tax therein in respect thereof shall be taxable only in that other State (XXXXXXXXXX).

In rejecting this argument, CRA stated:

[H[e is not subject to Canadian tax on child support and is not entitled to a deduction in respect of that support.

Can the following deductions made by France from the salary of an individual who has been resident in Canada for less than 60 months qualify as contributions to a pension fund in light of Art. XXIX(5) of the Canada-France Convention: [or as non-business income tax for the purposes of section 126]:

• CSG ("contribution sociale généralisée" ["general social contribution"])
• CRDS ("contribution pour le remboursement de la dette sociale " [contribution for the repayment of the social debt])
• Sécurité sociale vieillesse [old age social security] (retirement)
• Pole emploi (similar, in your opinion, to Employment Insurance)
• Retraite complémentaire [supplementary pension] (according to you, mandatory)?

After quoting Art. XXIX(5), CRA stated:

[T]he purpose of this provision of the Convention is to oblige a contracting country (in your example, Canada) to grant relief during the first 60 months of residence to an individual who contributes to a pension fund in his or her country of origin (France) while working in the country where he or she resides (Canada) and continues during this period to contribute to the pension fund in his or her country of origin.

For the purposes of paragraph 5 of Article XXIX of the Convention, the French authorities have confirmed to the CRA that the pension plans recognized for French tax purposes are the following (the "List"):

• Régime général de la sécurité sociale[General social security system];
• Régimes des salariés cadres [Executive employee plans] (plans grouped within the Association Générale des Institutions de Retraite des Cadres (AGIRC) [General Association of Retirement Commissions for Executives and Managerial Staff], including in particular the Institution de Retraite des Cadres et Assimilés de France et de l'Extérieur (IRCAFEX)) (Retirement Commission for Executives and Managerial Staff in France and Abroad).
• Non-management employee plans (plans grouped within the Association Générale des Régimes de Retraite Complémentaire (ARRCO)[General Association of Supplementary Pension Plans], including in particular the Caisse de Retraite pour la France et l'Extérieur (CRE) [ Retirement Fund for France and abroad]);
• Voluntary insurance plan of the general social security system designed to enable expatriate employees to remain in a social security plan (Caisse des Français à l'étranger)[Fund for French Abroad]; and
• Supplementary retirement plans provided by a company or a professional association which the employee is required to join.

A resident of France was awarded compensatory benefits by order of the applicable French court on her divorce from her husband, consisting of a lump sum (payable in two instalments, separated by a year) and a life annuity payable on a monthly basis. She became a resident of Canada. Withholding tax was levied by the French tax authorities on the life annuity but not on any portion of the lump sum.

CRA found that the lump sum was a capital sum that was not includible in her income, but that the life annuity was includible in her income as a support amount.

CRA referred to Art. 18(4) of the Canada-France Convention, which provided:

Alimony and other similar payments arising in a Contracting State and paid to a resident of the other Contracting State who is subject to tax therein in respect thereof, shall be taxable only in that other State.

It found that since the life annuity (but not the lump sum) was treated under Canadian domestic tax law (s. 56.1(4)) as a taxable support amount, Art. 3(2) of the Convention deemed it to be amounts referred to in Art. 18(4), so that Canada had the exclusive right to impose tax thereon.

The Directorate indicated that the exemption under Art. XVIII(1) of the Canada-France Convention for “[p]eriodic or non-periodic pensions … arising in [France] and paid in respect of past employment to a resident of [Canada]” applied to the surviving spouse of an individual (also, a Canadian resident) who had become entitled to the pension by virtue of previous employment in France.

The resident taxpayer had participated in a French plan that was a compulsory social security scheme providing a retirement pension to self-employed persons based on the years of service. After finding that the amounts received were "superannuation or pension benefits" within the meaning discussed in Abrahamson, the Directorate went on to find that they were not exempted under Art. 18(1) of the France-Canada Convention, given that they did not satisfy the stated condition that they be paid in respect of past “employment,” a word whose meaning could be taken, in light of Art. 3(2) of that Convention, to be as defined in ITA s. 248(1).

CCRA discussed the degree of exemption of social security pension payments by a Canadian resident (who otherwise would be taxable thereon under s. 56(1)(a)(i)) from the following jurisdictions:

Germany

The German Bundesversicherungsanstalt plan is a social security plan for the purposes of the treaty. The amount taxable by Canada is calculated on the basis of the non-capital portion of the pension

Belgium

Benefits received by a taxpayer from the Office National des Pensions (ONP) plan will only be taxable in Belgium and not in Canada.

France

Amounts received by a Canadian taxpayer from the Caisse nationale d'assurance vieillesse (CNAV), ARRCO, Association des régimes de retraite complémentaires des salariés, and CRICA, Caisse de retraite des cadres, are only taxable in France and not in Canada, provided they are paid in respect of previous employment.

Regarding whether a resident employee's retirement pension received from the Belgian National Pensions Office was exempted under Art. 18 of the 2002 version of the Canada-Belgium treaty, CCRA indicated that, based on its understanding that the National Pensions Office would be a Belgian government instrumentality, the pension (which otherwise would have been taxable) was exempted under Art. 18(2), so that, although the resident employee would be required to include the pension in income under s. 56(1)(a)(i), but would be entitled to a corresponding deduction in computing taxable income under s. 110(1)(f)(i).

The holder in France of an "assurance-salaire-vie," which is similar to a registered retirement savings plan except that a withdrawal from it is taxable only if made within the first eight years of the contribution, immigrates to Canada. The Directorate indicated that it was unlikely that withdrawals from the plan would be exempted under Art. XVIII(1) of the France-Canada Convention as a “pension” as the only contributions were employee contributions, nor would they qualify as an :annuity” per Art. XVIII(3). Under Art. XXI of the Convention, the withdrawals could be taxed in Canada, and also in France.

A payment under an unmatured RRSP is not considered to be a "pension" for purposes of paragraph 3 of Article 17 of the U.K. Convention because that amount will no longer fund any future entitlement under the RRSP.

"As long as the amount of the pension arising in the U.S. would have been excluded from taxable income in the U.S. by a U.S. resident recipient, such amount would be exempt from taxation in Canada by a Canadian resident recipient. Consequently, it [is not required] that the Canadian resident recipient be a resident or former resident of the U.S ... before he or she can qualify, under paragraph 1 of Article XVIII of the [U.S.-Canada] Convention ... ."

A taxpayer who receives a periodic pension from the International Monetary Fund should file a letter from the IMF annually with his or her T1 return.

Although an RRSP is a "pension" for purposes of Article XVIII of the Canada-U.S. Convention, funds paid out of an RRSP to the estate of a deceased U.S. annuitant would not qualify as "periodic pension payments" for purposes of paragraph 2 of Article XVIII. Accordingly, the reduced rate of 15% would not apply. The fact that the source of funds in the RRSP was dividends or interest would have no relevance.

A payment out of a RRIF is considered to be a payment under a retirement plan referred to in the definition of pension in Article 17, paragraph 3, of the Canada U.K.-Convention. If the payment from the RRIF qualifies as a periodic pension payment as defined in s. 5 of the Income Tax Conventions Interpretation Act, it would fall under the meaning of pension in Article 17 and would be exempt from Canadian non-resident withholding taxes pursuant to paragraph 1 of Article 17.

A retiring allowance paid to a U.K. resident in respect of his wrongful dismissal by a Canadian company would not be exempt under Article 17, Article 15 or any other Article of the Canada-U.K. Convention, given that it does not qualify as a "pension" nor as "salaries, wages and similar remuneration".

If a payment out of a RRIF qualifies as a "periodic pension payment" as defined under the Income Tax Conventions Interpretation Act, and it is paid to a resident of the U.S., the Canadian non-resident withholding tax on such payment will be 15% of the gross amount of the RRIF payment pursuant to paragraph 2(a) of Article 18 of the U.S. Convention.

Notwithstanding the definition for "annuity" found in s. 5 of the Income Tax Conventions Interpretation Act, a payment out of a RRIF which qualifies as a "periodic pension payment" under the ITCIA which is paid to a resident of the UK, falls under the term "pension" in paragraph 3 of Article XVII of the UK Convention.

In order for RC to grant treaty-exemption for the portion of U.S. pension benefits paid to a Canadian resident that represent a return of premiums, it will require a breakdown from the plan. Before RC will grant treaty-exemption on any other portion of the pension benefit, it will require a letter from the U.S. tax authorities confirming that such other portion will be exempt from Canadian tax in accordance with paragraph 1 of Article XVIII of the U.S. Convention.

A retiring allowance is not periodic pension income and therefore is not eligible for rate reduction under Article XVIII, paragraph 2 of the Canada-U.S. Convention.

If a transfer out of a U.S. pension plan directly into an IRA would not have resulted in the amount being taxed in the U.S. had the person been resident there at the time of the transfer, the exemption of Article XVIII of the Canada-U.S. Convention will apply.

The payment of the "minimum amount" under a RRIF to a U.S.-resident annuitant will be subject to withholding at the rate of 15% as limited by Article XVIII of the Canada-U.S. Convention. However, where the annuitant requests a payment in excess of the minimum amount for the year, the excess payment will not qualify as a periodic pension payment or will be subject to withholding tax of 25% pursuant to s. 212(1)(q) of the Act.

Alimony or maintenance paid by a person who is a U.S. resident at the time of the payment will be considered to arise in the U.S. for purposes of paragraph 6 of Article XVIII of the Canada-U.S. Convention even if the payments were made pursuant to an order of a Canadian court made while the payer was a Canadian resident.