CanCo is a Canadian Company that has shares traded on the TSX. USCo is its wholly owned US Subsidiary.
Person A was working with CanCo as a US-based contractor. They were awarded stock options in CanCo during this engagement. Later, they joined USCo as an employee and exercised the options.
Person B is an employee of USCo that was issued options in CanCo as part of their compensation and exercised them while employed.
When an employee of CanCo exercises their stock options, CanCo remits the taxes owing to the CRA for the taxable benefit. I cannot find any advice on what would happen when a US employee of a subsidiary does the same thing with the foreign stock options other than it is considered a non qualifying stock option and taxes would be due on the full amount. What do the two companies need to do and what advise should be given to the employees.