US Non-Resident Withholding Taxes and Asset Location

Dividends and interest from US securities are subject to the US Non-Resident Withholding Tax (currently 15%). However, the US-Canada Tax Treaty grants an exemption for certain registered accounts like RRSPs. So if you hold those securities in an RRSP (or certain other accounts), you will not be subject to the withholding tax. (Your brokerage usually handles getting this information to your ETF company so that they do not withhold the tax.)

Now that TFSAs are available, many people are treating them as an extension of the RRSP. But you should be aware that TFSAs are not exempt from the Non-Resident Withholding Tax under the US-Canada Tax Treaty.

So, considering only that you want to minimize the US Non-Resident Withholding Tax, the RRSP is the preferred location for applicable holdings. No withholding tax is applied. The next-best place is in a taxable account, because you can claim a foreign tax credit on the withholding tax paid. The worst place is the TFSA, because it is not exempt from withholding tax and on top of that, since it is not a taxable account, you cannot even claim the foreign tax credit.