Can I make an election to defer Canadian tax on my US retirement account until I withdraw funds?

Yes. To claim the treaty-based deferral of Canadian tax on the growth inside a US retirement account like a 401(k) or IRA, you generally need to make a specific election, historically filed with your Canadian tax return, rather than simply assuming the deferral applies automatically because the account is a US retirement plan. The exact mechanics and requirements have been adjusted over time by CRA's administrative practice, and can vary depending on the type of account involved, so relying on outdated assumptions about exactly how the election works is a real risk.

Making the election, and keeping clear records of having done so along with account statements showing contributions and growth over time, matters because Canada will eventually tax withdrawals from the account, and having a documented history makes that calculation far more straightforward than trying to reconstruct years of account activity after the fact.

Because the specific process, and which accounts it applies to, can change, and because getting it wrong could mean losing the deferral you were counting on, anyone with a US 401(k) or IRA who becomes a Canadian resident should confirm the current election requirements with an advisor rather than relying on general assumptions about how the treaty works.