What is a section 217 election and how does it help a non-resident receiving Canadian pension income?

A section 217 election lets a non-resident who receives certain types of Canadian-source pension and retirement-type income, things like CPP, Old Age Security, RRSP or RRIF payments, and similar amounts, choose to be taxed as though they were a Canadian resident on that income, using graduated rates and personal tax credits, instead of simply having a flat non-resident withholding tax deducted at source.

The appeal is straightforward: a flat withholding rate doesn't care whether this income is your entire livelihood or a small slice of a much larger income picture, while the graduated, credit-based approach under the election can produce a lower result for someone whose total income is modest. Electing means filing a Canadian return reporting this income, and, for the calculation, your worldwide income, rather than simply accepting the amount already withheld as final.

Because the election isn't automatically beneficial, it depends heavily on your overall income picture, which is discussed further elsewhere, it's a choice to make deliberately each year based on a real comparison, not something to assume will always help just because it's available. Getting the numbers run before deciding whether to elect is the sensible approach.