He didn't actually get called a fairy in Alpha Flight #50, he was supposed to be a half-elf (which doesn't take away from the fact that yeah, it was a crap story and would have been one even without the rewrite of epic fail). The "he's not gay, he's just a fairy!" came from other corners.

When he actually came out about fifty issues later, there wasn't anything about him being a fairy -- literally or otherwise -- which was what it seemed like you were referencing.