Ontario's Family Law Act governs property division between married spouses. The system is called "equalization of net family property" — it doesn't automatically split assets 50/50, but it does ensure each spouse ends up with an equal share of the wealth accumulated during the marriage.
How Equalization Works
Each spouse calculates their Net Family Property (NFP):
- NFP = (value of all property at date of separation) minus (value of all debts at separation) minus (value of property brought into the marriage)
The spouse with the higher NFP pays the other spouse half the difference as an "equalization payment." This doesn't mean assets are split — it's a financial calculation.
The Matrimonial Home: A Special Case
The matrimonial home receives special treatment in Ontario. Even if one spouse owned the home before marriage, its full value is included in both spouses' NFP calculation at separation. Both spouses have equal rights to possession of the matrimonial home during and after the marriage, regardless of who holds title.
Excluded Property
Certain property is excluded from the NFP calculation:
- Property owned before the marriage (other than the matrimonial home)
- Gifts or inheritances received during the marriage (and their growth)
- Damages for personal injury
- Life insurance proceeds
Common Law Couples
Ontario's equalization system only applies to legally married spouses. Common law partners do not have automatic property division rights and must rely on other legal theories (unjust enrichment, constructive trust) to make property claims — which are more complex and uncertain.