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Hi Nathan,
Yes, in many cases the bank should have issued an NR4 instead of a T5 once you became a non-resident of Canada. CRA’s current guidance says amounts paid or credited by a Canadian resident to a non-resident are generally reported on an NR4, not a T5.
That said, for a non-resident receiving ordinary bank account interest or GIC interest from an arm’s length Canadian bank, the interest is generally exempt from Canadian withholding tax. CRA states that, generally, interest paid or credited to a non-resident is exempt from Canadian withholding tax if the payer is dealing at arm’s length with the recipient.
So, if your only Canadian-source income is arm’s length bank/GIC interest, then in most cases:
CRA also notes that where non-resident tax has been properly withheld on passive income, that withholding is generally the final Canadian tax obligation, and elective returns are mainly relevant for items such as rental income and certain pension income, not ordinary bank interest.
The practical issue here is more of a slip-reporting error than an income tax liability issue. You should ask the bank to update its records to show your non-resident status and, if appropriate, cancel the T5 and issue an NR4 for future years. If the bank had a valid non-resident declaration on file but still issued a T5, it is worth asking them to correct the prior-year reporting as well. CRA’s payer guidance says Canadian residents paying amounts to non-residents must file an NR4 return for reportable non-resident payments.
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