differential mortgage rate applied by Royal Bank of Canada for non-resident of some countries

Hello, I have gone through a puzzling and frankly hard to believe experience. As a non resident Canadian (although Canadian citizen), I was granted a mortgage to purchase a home. However, when I actually submitted the letter of purchase to the Royal Bank, I was told that the rate I was quoted beforehand of 2% was to be increased to 2.24% for the following reason: (I quote) 'The majority of countries apply a withholding tax to certain types of payments (most commonly being interest and dividends) made by a resident of their country (i.e. the payer is resident) to a non-resident (i.e. the recipient of the payment is a non-resident). No country requires the payment to be grossed up. RBC has made the policy decision to gross up the interest rate charged to the client instead of receiving a lower net interest rate on the mortgage to a non-resident as compared to what RBC would earn on a mortgage to a Canadian resident. 'It is a standard procedure that all banks must follow for taxation purposes and as mentioned to you before I can only speak on behalf of RBC and cannot explain why your other bank is not following protocol. In my particular case, I was told that residents of countries which have an tax agreement with Canada (including Brazil and Indonesia, among others), will be charged extra.' After I consulted 3 other banks, no one ever mentioned that and noone certainly applied this rule to my purchase. Can you tell me more about this 'law' and which are the countries (and their residents) which are affected by this mortgage rate increase to cover tax witholding? Thank you