A passive foreign investment company (PFIC) is a United States tax concept, not a Canadian one. It refers to a foreign corporation that meets either an income test or an asset test based on passive income or passive assets, held by United States tax residents. Many Canadian mutual funds, exchange-traded funds, and similar pooled investments are PFICs from the United States perspective.
For United States holders, PFICs carry annual reporting on a dedicated form and a default tax regime that can be harsh, with mitigating elections available in some cases. The concept matters for Canadians who become United States tax residents and bring Canadian pooled investments with them. Pre-move planning — such as reviewing holdings before residency changes — is commonly used to manage the exposure.