Phoenix Pay System

On February 8, the government provided an update on the Phoenix pay system. The update shows that, although some progress is being made in addressing important issues, there is still a lot of work ahead.

"Our members are growing increasingly frustrated with this situation. It is clear that the government needs to improve its communication with the workers affected by Phoenix," said Chris Aylward, PSAC Executive Vice-President. "PSAC is doing everything we can to ensure the pay system is fixed so public service employees get paid correctly and on time.”

The Phoenix pay system has been a disaster for our members. Members have been underpaid, overpaid and not paid at all. Learn more about what the union has been doing to get this fixed.

Not deducting union dues correctly is one more way that Phoenix has failed public sector workers. You can help us push the government to pay public sector workers correctly, every pay day.

PSAC is working with the Minister of National Revenue to establish a process to resolve the taxation of Phoenix damages.  

PSAC has argued that the $2,500 in general damages negotiated in 2020 to compensate members for the stress, aggravation and pain and suffering caused by the Phoenix pay system should be tax-exempt.  

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.

Important: the following is for members and retirees who received their Phoenix general damages payment in 2022 or following years.

If you received your Phoenix general damages payment in 2021 please return here for detailed instructions on how to proceed in your circumstances.

PSAC determined to get the fair settlement its members deserve

PSAC President Chris Aylward issued the following statement:

After two years of negotiations, the Liberal government has offered only 1.25 days of leave per year, for 4 years, as general compensation to every member who has fallen under the disastrous Phoenix system. PSAC could not agree to this meagre proposal.

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 

Treasury Board has provided PSAC with a letter from CRA setting out its preliminary view that the general damages in the Phoenix settlement agreement are taxable. This letter, which was prepared at Treasury Board’s request and without PSAC’s input, is not a formal tax ruling and PSAC is contesting this conclusion.

In 2020, PSAC negotiated Phoenix general damages for approximately 165,000 PSAC members to compensate for the stress, aggravation and pain and suffering they endured because of the broken pay system. 

Treasury Board treated Phoenix general damages as taxable income – deducting tax from the payment PSAC members received – but the Union maintains that these damages should be tax-free like just like other damages agreements.