Yes, if you are a U.S. citizen or resident alien, you must report this retirement income on your U.S. return. Since it was paid in CA$, you are allowed to convert this amount to its US$ equivalent.
You have a choice of which rate to use, so use the one that is most beneficial to you. According to the IRS:
Use the exchange rate prevailing when you receive, pay, or accrue the item. If there is more than one exchange rate, use the one that most properly reflects your income. You can generally get exchange rates from banks and U.S. Embassies.
The IRS also lists the following resources for obtaining an exchange rate:
Governmental Resources
Also, you have two options to report a foreign pension:
Option 1 (Best choice) : You can enter the foreign pension income on Form 1040, Line8 as "other income" or "foreign pension."
You won't need a Payer ID, state or zip code with this approach.
The IRS wants the pension reported as income - unless your pension receives special tax treatment, it is perfectly OK to report it as Miscellaneous Income.
To make entries on Line 8, go to the Other Reportable Income interview, the very last interview in Wages and Income (Federal Taxes tab > Wages & Income > Less Common Income > Miscellaneous Income).
In TurboTax Online, enter "other reportable income" in the Search Box and then select "Jump to Other Reportable Income".
If you choose this way, then you won't have to create a substitute Form1099-R, by filing Form 4852 and you won't encounter e-file errors over the Payer ID.
However, the end tax result (in terms of United States tax rate and amount assessed) will be identical under both methods.
Option 2: Prepare a Substitute Form 1099-R and a Form 4852 to report that foreign pension on your tax return.
In the Retirement Income interview for Pension Plans (Form 1099-R), check "I need to prepare a substitute Form 1099-R" and follow the instructions in the interview.
