CRA rules against civil service union push to make Phoenix damages non-taxable by Terry Pedwell, The Canadian Press Posted May 3, 2021 2:59 pm EDT Last Updated May 3, 2021 at 3:14 pm EDT OTTAWA — Canada’s biggest civil service union says it is considering taking legal action after the Canada Revenue Agency ruled that damages paid to federal employees in connection with the troubled Phoenix pay system are taxable. The Public Service Alliance of Canada says it has received notice from CRA that the agency won’t review the taxability of the payments. The payments were part of a contract settlement dealing with the financial, mental and emotional harm caused to government employees who were overpaid, underpaid or not paid at all through the Phoenix system.