Ok, I am actually studying immigration law and asked my instructors this question during class today. My instructors are Immigration Lawyers and Certified Immigration Consultants, a few of whom are former Visa Officers.
Here is their answer:
A refusal of an application for any type of visa to Canada DOES constitute a denial of entry to Canada. A refusal of entry at a Port of Entry to Canada ALSO constitutes a denial of entry to Canada. So if you have been denied a visa application (any type) or been denied entry at the border, you answer YES to this question on the Background Declaration form.
WARNING: If you answer NO to this question because you have been denied a visa application but have never been denied at the Port of Entry (because you COULDN'T get there in the first place), the Visa Officer reviewing your new application for PR (or any type), will see through the CAIPS or FOSS notes that you had in fact applied before, been refused, gave a FALSE answer on the Background Declaration, and are therefore guilty of misrepresentation and you will be automatically barred from Canada for two years.