Is payback money tax free?

I was on LTD for a while when the told me to apply for CPPD. I was accepted and they back dated me one year. This is when Sunlife wanted one year of LTD payback. My question is: since they paid me for that year and I paid taxes on this money, is the money that I pay back tax free because I have already paid taxes on it?

It sounds like you pay taxes on your payments from Sunlife.

Did CPP pay the money directly to you? And if yes, was the CPP money taxed?

CPP-D is taxable but might not have tax withheld at source (when it is paid to you).
It sounds like your SunLife had tax withheld.
My guess is SunLife will request the pre tax amount back but put on the t4p they give you at tax time to show you paid the taxes they deducted.