No, your settlement is not taxable. Revenue Canada has determined that damages for pain and suffering or general damages are not taxable as they represent a personal compensation to you. As well the loss of wages that we recover, because the calculation is based upon your after-tax income recovery (in other words we reduce the amount as if you pay taxes) you in essence have already paid tax on the loss of income recovery and thus there are no taxes payable.
Thirdly there are no income taxes payable on future treatment costs as those amounts you need to pay to your future healthcare providers and similarly with future loss of housekeeping claims the amount recovered is not taxable at all.
If Revenue Canada during an audit saw a large deposit in your bank account after settlement, simply notify our firm and we will contact Revenue Canada and explain to them that it is from a personal injury settlement and it is not taxable.