Canadians are entitled to ask the Canada Revenue Agency (CRA) to determine their "residency" or "non-residency" status for tax purposes using form NR73. Most are told that they are "factual" or continuing residents of Canada, even if they live in Mexico full-time. Non-residency status is difficult to attain.

The new Canada Mexico Tax Treaty stipulates that 15% withholding tax be withheld on pensions originating in Canada and paid to Non-Residents living in Mexico.
There are no capital gains taxes payable by Canadian Non-Residents living in Mexico.

Some examples of the tax consequences:
1.)A retired Canadian with a $70,000. pension living full-time in Mexico who is judged by CRA to be a continuing resident of Canada would pay about $16,500 in taxes but the same person would only pay only (15%) $10,500. if they were a Non-Resident.
2.) A person with lower income, say below $32,000. would be better off paying tax as a continuing resident of Canada as opposed to the Non-Resident rate of 15%.
Pleasedo your own calculations as provincial tax rates and deductions vary.

Just because the CRA decides that you are a continuing resident of Canada for tax purposes, that does not mean that you don't have to live in Canada to qualify for other benefits, such as: provincial health care, GIS, or even a driver's license all of which require you to be physically resident in Canada, at some time. Having any of these benefits will normally cause CRA to rule that you are a continuing resident of Canada. If you live fulł-time in Mexico and are honest you would not be entitled to any of these benefits, IMHO. There are exceptions, of course.