When married couples separate or divorce in Canada, they are entitled to what is called the equalization of Net Family Property, also known as N.F.P. The N.F.P. is divided up between the spouses to equalize the property acquired over the course of the marriage. This form of property equalization is a remedy only available to legally married spouses.

There are numerous federal and provincial statutes that have accorded many of the same rights as married couples to unmarried same-sex and opposite-sex couples who cohabit that pertains to taxes, insurance, pensions, and other benefits. However, this particular form of property division is not available to co-habiting spouses such as common-law spouses.

Common-law marriage is a term sometimes used to describe the relationship between people who live in a marital relationship but who have not had a legal marriage. Although these types of cohabiting couples may consider themselves married, they do not have the same property rights as spouses who are married.

Equalization of net family property is not determined by one’s conduct during the marriage. As such, all parties to a marriage are entitled to equalization and can apply at any time following separation for equalization of family property under Ontario’s Family Law Act (F.L.A.). Under the legislation, there are presumptions in place. Accordingly, the F.L.A. holds that, “inherent in the marital relationship there is equal contribution”. Therefore, it is this equal contribution to the marriage that the statute seeks to provide “equitable sharing” upon the breakdown of the marriage.

There are two main steps to calculate a net family property equalization payment:

Step 1

Each spouse must calculate their individual net family property. To do this, each spouse would need to add up the value of their property less any debts on the date of separation. From this amount, they would then subtract the value of their property less any debts on the date of marriage. If a property is owned jointly, each spouse would include half the value of that property in their N.F.P.

If at the end of this calculation, a spouse’s N.F.P. is a negative amount, then their N.F.P. is considered to be zero.

Step 2

At the end of both spouses calculating their individual N.F.P., the spouse with the higher N.F.P. would then pay the other spouse half of the difference.

There are special rules that surround matrimonial homes, gifts and inheritances that are brought into the marriage, and Canada Pension Plans. These rules significantly affect the outcome of the equalization payment one would receive, so it is best to seek legal counsel to aid you with this process.

If you would need a knowledgeable family lawyer to explain this process in more detail or would like assistance with all of your family law inquiries, do not hesitate to contact Arkadiusz J. Empel at Empel Law, by dialing 416-479-8531 (ext. 101).


Po Polsku (In Polish)

Arkadiusz J. Empel urodził się w Polsce, w Katowicach. Jest biegły w języku polskim i gotowy pomóc kliętkom w sprawach lokalnych oraz zagranicznych. Aby zasięgnąć pomoc oraz porade w języku polskim, prosze zadzwonić pod number 416.479.8531 (ext. 101).