Mr. Speaker, what follows is the response from the Canada Revenue Agency, or CRA, as of October 24, 2023, the date of the question.
With regard to (a), per a review of the records available within its systems, the CRA has held one Canadian resident tenant liable for failing to withhold and remit the tax payable by their non-resident landlord as a result of an audit.
With regard to (b), only one case, which was a commercial tenancy, was found. To protect the integrity of the CRA’s work and to respect the confidentiality provisions of the Acts it administers, the CRA cannot provide taxpayer information or comment on specific taxpayer files.
With regard to (c), the CRA’s Non-Resident Audit Manual contains guidance on the administration of Part XIII of the Income Tax Act in cases where rental income for Canadian properties is received by a non-resident.
With regard to (d), to preserve the integrity of its compliance programs, as a standard practice the CRA does not disclose specific details about its audit or review techniques. However, a general summary of the CRA’s Non-Resident Audit Manual referred to in (c) follows: If a payer fails to withhold the required amount of the Part XIII tax from an amount paid to a non-resident, the payer and non-resident are both liable for this amount and the general practice of the CRA is to assess the payer for any amount owing. However, the CRA’s Non-Resident Audit Program takes into consideration all relevant facts and may instead assess the non-resident.
With regard to (e) and (f), as there are currently no plans to make changes to the CRA’s policies, directives, standards or guidelines on administering Part XIII of the Income Tax Act following the ruling of the Tax Court of Canada in 3792391 Canada Inc. V. The King, 2023 TCC 37, no further details regarding modifications apply in this case.