Government short-changing members on Phoenix damages
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 with information they requested in order to revisit their initial opinion on taxability.
It is completely unacceptable for Treasury Board to deny CRA the information they need to provide a revised opinion before issuing the general damages payments. Their own letter to PSAC confirms that CRA is willing to work with them to revisit their opinion based on the facts raised by PSAC – information that CRA was not provided by Treasury Board originally. This is a crass attempt to interfere with the review by CRA, and to expedite the claw back of the Phoenix damages settlement.
It’s why we’re asking all members to call their MPs. Call your MP now.
On the very week of Phoenix’s 5th anniversary, the government has found yet another way to hurt PSAC members impacted by years of pay problems.
CRA relied on information from Treasury Board when it issued an initial opinion about the tax implications of the Phoenix settlement. The opinion contained a number of errors and when these errors were pointed out by PSAC, particularly with regards to general damages for pain and suffering, CRA agreed to re-issue an opinion if Treasury Board joined us in clarifying the facts.
Treasury Board has refused to cooperate, denied that they even understood this mutual agreement between the three parties, and are openly stating to members that general damages are to be taxed – despite the fact that they are blocking CRA’s ability to revisit their opinion.
If their reckless disregard for our members continues, it could ultimately lead to thousands of unnecessary tax challenges and lengthy retroactive payments.
Next steps: Going to CRA directly
With the government refusing to cooperate, we have decided to submit our own declaration of facts to CRA directly, along with case law addressing the awarding of damages and those damages not being subject to taxation. CRA traditionally only engages with employers to provide opinions of taxability, but it is possible that they may choose to consider the new facts that we provide them.
We will report back to the membership as soon as possible.
Frequently Asked Questions
Why wasn’t taxability negotiated in the settlement itself?
The short answer is: we can’t do that.
The union and employer, the parties to the agreement, cannot dictate to CRA how it interprets tax laws. The taxability of damages is determined by what the money is intended to compensate for. The parties added specific language in the agreement to specify that the general damages were for “stress, aggravation, pain and suffering” in recognition of the impact on members’ lives. There is a strong precedent of damages for those purposes being deemed non-taxable.
What if CRA maintains its opinion in light of the government’s actions?
In the coming weeks, if CRA refuses to issue a new or different opinion due to the government’s inaction, members will have to force an official ruling from CRA by making individual appeals.
PSAC is doing everything we can to avoid this outcome as it puts the burden on our members to file the appeals, but if it becomes our last option we will develop streamlined systems to support members in making the claims quickly and easily.
It is our top priority that PSAC members receive the full compensation that we negotiated, and which they deserve.
We will continue to update members as we work to bring this to a conclusion.Call your MP
Stop the taxation of Phoenix damages
The Liberal government has shamelessly chosen the fifth 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 the CRA to review the taxability of Phoenix damages, rather than waiting just a few more days, 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.
The government still has time to do the right thing. General damages should not be taxed, so we’re calling on key ministers to immediately intervene to fix this before payments are issued.Take ActionIt’s a slap in the face to the tens of thousands of PSAC members who suffered years of pay problems, and then worked non-stop during this pandemic to deliver aid and benefits to millions of Canadians in crisis. And it’s a betrayal to those same PSAC members who agreed to a $2,500 Phoenix settlement reached for “stress, aggravation, and pain and suffering” – compensation for which is normally not taxed.
We will pursue every legal route to secure the full compensation that our members are entitled to. This includes tax challenges that would retroactively see our members reimbursed should the payments be issued as planned on the March 3, but our goal remains to avoid any time consuming and complex tax disputes for our members.
Phoenix short-changed PSAC members for years – the last thing they deserve is for the government to short-change them yet again.
In solidarity,
Chris Aylward
PSAC National President
PS: We will continue to work to resolve this problem and updates will follow in the coming days — you will be the first to hear an update via email, website, or our social media channels.
http://psacunion.ca/government-rushing-phoenix-damages-payment-without#newmode-embed-2924-31645
Take action! Fill out your information to a send a letter to Minister Jean-Yves Duclos and Minister Anita Anand.
Regional Bargaining Conference (Ontario and Atlantic Regions) and bargaining survey
Regional Bargaining Conference (Ontario and Atlantic Regions)
On February 12th, 2021, CEIU’s Ontario and Atlantic regions will be coming together to prioritize our demands for the next round of collective bargaining.
We are currently accepting expressions of interest from CEIU members who wish to be involved. Please see the attached poster for more information. All expressions of interest should be sent via the attached form dedicated to this event.
Expressions of interest are due by February 7, 2021, 11:59 pm
Important: You are also encouraged to fill this survey even if you do not intend to participate: https://www.surveymonkey.com/r/LFRCBZ9
In Solidarity,
CEIU Ontario Region’s Collective Bargaining Committee:
Doreen Dixon
Lisa Flaherty
Sara Johnson
Lisa Prescott
Your National Vice-Presidents:
Travis Lahnalampi, Ontario
Paula Woodcock, Ontario
ceiu581.com 