Dividing Property After Separation in Canada

When a relationship ends, property and debts are divided under the law of the province or territory, not the federal Divorce Act. Every province gives married spouses a right to share in property built up during the marriage, but the method varies: Ontario uses an equalization payment, while British Columbia divides family property and debt directly. Common-law partners have similar rights in some provinces and almost none in others. Strict deadlines apply, often starting from the date of separation or divorce.

This article is part of the guide to family law in Canada.

The short version

• Property division depends on the province and on whether the couple was married or common-law.
• Ontario equalizes the growth in each spouse's net worth during the marriage.
• British Columbia divides family property and family debt equally, with excluded property kept separate.
• Gifts, inheritances and pre-relationship property are often excluded, but the details differ by province.
• The family home often gets special treatment.
• Canada Pension Plan credits can be split between spouses and common-law partners through Service Canada.
• Deadlines can be as short as two years from separation or divorce.

Married Spouses: How the Main Provinces Divide Property

Ontario: equalization of net family property

Ontario does not divide individual assets. Instead, each spouse calculates their net family property:

1. Value everything they own on the valuation date, usually the date of separation, minus their debts.
2. Subtract the net value of property they owned on the date of marriage, except the matrimonial home.
3. Exclude certain property received during the marriage, such as gifts and inheritances from third parties, as long as they were not put into the matrimonial home.

The spouse with the higher net family property generally pays the other half the difference. This is called an equalization payment. Courts can order an unequal payment only where equal sharing would be unconscionable.

Example: if one spouse's net family property is $400,000 and the other's is $100,000, the difference is $300,000, and the first spouse would generally owe an equalization payment of $150,000.

British Columbia: family property and family debt

Under BC's Family Law Act, spouses are generally entitled to an equal share of family property and are equally responsible for family debt.

• Family property is everything either spouse owns on the date of separation, unless it is excluded.
• Excluded property includes property a spouse owned before the relationship, gifts and inheritances, and certain other property. The spouse claiming an exclusion must prove it.
• Any increase in value of excluded property during the relationship is family property and is shared.
• The same rules apply to common-law spouses who lived together in a marriage-like relationship for at least two years.

Other provinces

The Family Home

The home the family lived in usually gets special rules.

• Ontario: the full value of the matrimonial home is included in net family property even if one spouse owned it before the marriage, and both married spouses have an equal right to live there until an agreement or court order says otherwise, regardless of whose name is on title.
• Other provinces: many have similar rights of possession for married spouses and special protections against selling or mortgaging the home without consent.

Common options after separation include selling the home and dividing the proceeds, one spouse buying out the other's share, or one spouse staying for a period, often until children finish school.

Pensions

Pensions are often one of the largest assets in a separation.

• Workplace pensions are valued and divided under provincial pension laws, and many allow a transfer to the other spouse at separation.
• Canada Pension Plan credits earned while living together can be split equally through Service Canada. Separated or divorced married spouses can apply after at least 12 consecutive months apart, with no general time limit after divorce. Separated common-law partners who lived together for at least one year must generally apply within four years of separating. In Ontario, spouses cannot contract out of the CPP credit split.
• RRSPs can generally be transferred between spouses on separation without immediate tax if done properly under a written agreement or court order.

Debts

Debts are generally taken into account in the same way as property. In Ontario, they reduce net family property. In BC, family debt incurred during the relationship is generally shared equally. Debts in joint names remain the responsibility of both people to the lender, regardless of what a separation agreement says, so joint accounts and lines of credit should be dealt with carefully.

Common-Law Partners

Common-law partners' property rights vary dramatically by province.

In provinces without statutory rights, the Supreme Court of Canada's decision in Kerr v. Baranow allows a partner to claim a share of wealth built up through a joint family venture, or compensation for unjust enrichment. These claims depend on evidence of contributions and are usually more complex than statutory division. See common-law separation rights by province.

Deadlines

Deadlines can sometimes be extended, but that is not guaranteed. Getting advice early protects these rights.

Protecting Property During a Dispute

Courts can make orders to preserve property while a case is ongoing, such as orders restraining a spouse from selling or transferring assets or from removing money from accounts. In BC, a spouse can apply to restrain the other from disposing of property at issue. Both spouses must also exchange full financial disclosure.

Frequently Asked Questions

Is everything split 50/50?

Not exactly. Many provinces start from equal sharing of property built up during the relationship, but exclusions, the method of calculation and the rules for common-law partners mean the result is rarely a simple split of every item.

Is an inheritance shared?

In many provinces, an inheritance received during the relationship is excluded from division. In Ontario, the exclusion can be lost if the inheritance is used for the matrimonial home. In BC, any growth in value of excluded property during the relationship is shared.

What if one spouse owned the house before the marriage?

In Ontario, if it was the matrimonial home at separation, its full value is generally included and the pre-marriage value cannot be deducted. In BC, the value at the start of the relationship is generally excluded, but growth in value is shared.

Can we divide property ourselves?

Yes. Most couples divide property in a separation agreement. Full financial disclosure and independent legal advice are essential for the agreement to hold up. See what to include in a separation agreement.

Does who caused the breakup affect property division?

No. Property division in Canada does not depend on who was at fault for the breakdown of the relationship.

Need help dividing property? Search LawyerDirectoryCanada.ca for family lawyers by province and city, and see how much a divorce lawyer costs.

Sources

• Family Law Act (Ontario), e-Laws
• Dividing property and debts after you separate, Legal Aid BC
• Dividing property and debt in family law matters, Clicklaw Wikibooks
• Family Law Act (BC), Part 5: Property Division, BC Laws
• Canada Pension Plan credit split, Manitoba Family Law
• CPP credits after a common-law separation, Steps to Justice
• Common-law partners and property, Manitoba Family Law
• Common law relationships and registered domestic partnerships, Nova Scotia Family Law
• Parental union: new rights for common-law couples with children, Éducaloi