And right now due to covid, your niece would not be allowed into Canada at all - the exemptions only apply to immediate family members.
This clause has nothing to do with immigration, people with valid immigration visas are not looked at by family relation, heck, some don't have any family members in Canada and would still be able to enter with a valid visa today, say, a temporary foreign worker heading to Windsor.
My niece won't be going through the border as "my niece", she will be crossing as a "Permanent Resident Family Class", just like any other immigrant.
Now, having said that, BECAUSE of this clause I would not be able to go to the US to visit my uncle, and my uncle would not be able to come visit me from the US, since this agreement is reciprocal.
Or, if my niece and my daughter wanted to come visit me today from Moscow, together, and BOTH would have valid 10-year Canadian tourist visas, my daughter actually would be able to come, but my niece would not. It's the same as a British daughter , who does not need a visa to come to Canada, can come visit her father in Canada and she will be let in, as an immediate family member, who falls into this exemption.
Or, an American daughter would be let in and an American niece would not. A niece would need a different reason for entry into Canada, aside for seeing her uncle.
