The taxpayer sought an exemption under s. 56(1)(n) in respect of income from the Ontario Health Research Institute ("OHRI") in connection with a postdoctoral fellowship at the University of Ottawa. The facts were essentially the same as in Huang, which had been decided against the taxpayer, except that the Minister made the further argument that, as the taxpayer's payment from the University was employment income, s. 56(1)(n) was not available to the taxpayer to begin with.
Woods J. agreed and denied the taxpayer's appeal. She stated (at para. 20):
If the payments are received by virtue of employment, this takes precedence. However, in making this determination, it is relevant to consider the dominant characteristic of the payments, whether it is compensation for work or student assistance.
In the circumstances, the dominant characteristic of the payments was compensation for work. The taxpayer's activities with the OHRI were more in the nature of research than education, and the OHRI exercised a degree of control over the taxpayer's activities in the manner of an employer.