CRA maintains its policies on retiring allowances

The CRA positions in the Folio on Retiring Allowances are generally quite similar to those in IT-337R4, although CRA no longer discusses the treatment to employers of retiring allowances, presumably because this would not fit into its Folio taxonomy. Although the significance of the distinction from ordinary employment income is fading with the phasing out of the s. 60(j.1) transfers to RRSPs, CRA also still recognizes that damages received by an employee for harassment, defamation or human rights violations are exempt.

Neal Armstrong. Summary of S2-F1-C2, Retiring Allowances under s. 248(1) – retiring allowance.