If they're not in the US though (as a Canadian), they're not a resident, and therefore not a "foreign resident".
The entire situation is weird because as we both mentioned elsewhere, the correct approach here is a PEO (or setting up the appropriate hiring organization in Canada), rather than claiming to live (or work) in the US in order to get a TN (either or which would subject them to US taxation), and then claim to not when it comes to taxes.
If they're not in the US though (as a Canadian), they're not a resident, and therefore not a "foreign resident".
The entire situation is weird because as we both mentioned elsewhere, the correct approach here is a PEO (or setting up the appropriate hiring organization in Canada), rather than claiming to live (or work) in the US in order to get a TN (either or which would subject them to US taxation), and then claim to not when it comes to taxes.