Update: Taxability of Phoenix damages
Recently Treasury Board provided the PSAC with the Canada Revenue Agency’s (CRA) preliminary opinion that the general damages awarded in the Phoenix settlement are taxable. It is important to note that this is not a formal tax ruling and that it will be challenged. Your union believes that these general damages which are awarded to Treasury Board members are non-taxable, similar to other damages recognized by CRA.
PSAC’s review of the CRA preliminary decision is that it contains several factual errors and misapplies relevant income tax principles on this issue. As a result, PSAC has contacted both Treasury Board and the CRA about our concerns and will continue to fight to ensure that members receive full compensation in a timely manner.