Sisters, brothers, and friends,
As stated in a communication in March 2022, the Union of Taxation Employees (UTE) encourages its members to file individual notices of objection. We anticipate that a large number of applications may pressure the government to review the tax treatment of compensation for all UTE members rather than adjudicating thousands of individual notice of objections applications.
Sisters, Brothers and Friends,
For several months now, I have been following up with PSAC to find out if they had reached an agreement with CRA with regard to the taxability of the Phoenix general damages compensation. Treasury Board treated Phoenix general damages as taxable income – deducting tax from the payment UTE members received – but we maintain that these damages should be tax-free just like other damages agreements.
We are happy to announce that the federal government has updated its Phoenix general damages webpage and that the claims process for former and retired members is now available.
The general damages compensation covers our members who were employed between 2016 and 2020. Entitlement to compensation is as follows:
The federal government has updated its Phoenix general damages webpage with new timelines for current PSAC members and former and retired members:
Current PSAC members working for the federal public service received general damages as part of their March 3 pay. However, several issues remain outstanding:
former PSAC members — including retirees — are still waiting for their general damages payments
current and former members who experienced out-of-pocket expenses or severe losses due to Phoenix are still waiting for the launch of a new claims process
After months of waiting, the Canada Revenue Agency (CRA) has rejected our request to review the taxability of Phoenix damages. This is directly due to Treasury Board’s refusal to provide CRA with a joint statement of facts which corrects CRA’s understanding of the purpose of our damages settlement agreement.
In an April 27 letter from the CRA, the Agency states:
Now that current PSAC members will be receiving Phoenix general damages on March 3, retired and former PSAC members may be wondering when they will receive their portion.
PSAC has been informed that the federal government plans to move forward with taxing Phoenix general damages on March 3rd and that they will not provide the Canada Revenue Agency (CRA) with information they requested in order to revisit their initial opinion on taxability.
PSAC has been informed that the federal government plans to move forward with taxing Phoenix general damages on March 3rd and that they will not provide the Canada Revenue Agency (CRA) with information they requested in order to revisit their initial opinion on taxability.
The Liberal government has shamelessly chosen the 5th anniversary of the Phoenix pay system disaster to short-change thousands of PSAC members on their compensation for years of pay problems.
Even though PSAC is in the process of working with CRA to review the taxability of Phoenix damages, the federal government has confirmed that it intends to ignore these efforts and issue the up to $2,500 for our members, on March 3 – with taxes deducted. Treasury board provided no explanation for their actions.
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