I receive a pension from another country and now live in Ontario — is it taxable in Canada?

As a Canadian resident, you are generally taxed on your worldwide income, which includes foreign pension payments. The full amount is reported on your Canadian T1 return in Canadian dollars (converted at the applicable exchange rate). Your foreign pension income is added to your other income and taxed at your marginal rate.

However, Canada has tax treaties with dozens of countries, and most of them contain specific provisions for pension income. These treaties may allow the source country to tax the pension, entitle you to a foreign tax credit in Canada for tax paid to the foreign country, or in some cases reduce the source country's withholding rate. The Canada Revenue Agency's Folio S5-F2 addresses treaty benefits for non-resident pensions.

The foreign tax credit prevents most double taxation: if you paid foreign tax on the pension, you can generally deduct that amount from your Canadian tax. You cannot claim a credit for more than the Canadian tax attributable to that income. Social security payments from foreign governments (including US Social Security) are subject to specific treaty rules — the rules for these differ from ordinary private pensions.