Where does a trust reside?

In Canada a trust normally resides where the trustee is located.  However, if the mind and management of the trust is not with the trustee then the courts have said that a trust resides where the mind and management of the trust is located.  If the trust is considered resident in Canada it must pay taxes on its worldwide income in Canada.

In the US, a trust is a domestic US trust of one or more US persons have authority to control the decisions of the trust.  Don't forget that US persons includes US citizens, whether or not they reside in the US.   If a trust is resident in the US it must pay taxes on its worldwide income in the US.

So if a US citizen, resident in Canada is a trustee of a trust and making the decisions, the trust will be resident in both the US and in Canada under the individual country tax rules.  But the trust shouldn't have to pay full taxes in both countries, that's one of the reasons for the treaty - to eliminate double tax.  

Unfortunately, the treaty does not treat the residency of trusts automatically.  If a trust is resident in both Canada and the US for tax purposes, you must apply to the competent authorities of each country and they, not you, will make the decision on the residence of the trust.