No credit for withholding tax if you have net capital loss?

If you have dividends from a foreign country (say US), and taxes withheld on those dividends, but you also have enough capital losses in stocks from that country that your net income from that country is negative. In this case, do you get zero credit from those foreign withholding taxes paid, and they're gone forever -- AND you still have to report the dividend income on line 121 and pay taxes on them?

I should explain what I mean: this has to do with T2209, line 433, net foreign non-business income. Normally you can claim withholding tax credit on Schedule 1 line 44, Federal Foreign Tax Credits, but CRA also states "Foreign-source taxable capital gains and allowable capital losses are taken into account in calculating a "non-business-income tax" foreign tax credit."

So if the capital losses neutralize the dividend income for one country, then it appears that federal foreign tax credit becomes zero for that country.

HOWEVER, I have found the following info: "The foreign taxes are often not completely recovered by the foreign tax credits. Non-business foreign taxes which are not recovered as a tax credit may be deducted from income on line 232 of the personal tax return, "Other deductions", as a s. 20(12) deduction."
http://www.taxtips.ca/filing/foreigntaxc...

So it seems that such withholding tax can still be declared on line 232. Can any experts confirm?

I'm sorry to say that the answer is no.

Here's why: If you had received positive capital gains instead of capital losses, you would not have been subject to any withholding on the capital gains. If the foreign country (US) tax is not subject to taxation when you have a gain, you can't take a credit for it when you have a loss.

Of course, you can still receive credit in Canada for foreign taxes paid in the U.S. You cannot, however, take your US capital losses and use them to offset US dividends.