CRA indicates that an employee received a retiring allowance under a “non-compete” if it compensated for a loss on an investment sale occurring because of his termination

CRA indicated that an amount received by a former employee from his employer under a non-compete agreement entered into after the termination of his termination of employment would generally be deemed to be employment income to him pursuant to s. 6(3)(b). However, in this case, the amount paid to the employee was equal to the loss he sustained on disposing of an investment following his termination. CRA stated that if the investment was sold only because of the termination, i.e., the investment would not otherwise have been sold, the amount received from the employer could reasonably be regarded as compensation for loss of employment, so that it would be a retiring allowance.

Neal Armstrong. Summary of 2015-0599581E5 under s. 248(1) – retiring allowance.