How Is Property Divided in an Ontario Divorce Under the Family Law Act?

In Ontario, the spouse with the smaller net family property is entitled to one-half of the difference between the two, called the equalization payment. Net family property is the value of all property a spouse owns on the valuation date, minus debts and the net value of property owned on the marriage date, and it is never less than zero. The valuation date is the date of separation with no reasonable prospect of living together again, or the divorce date if that is earlier.

Some property is left out, including gifts or inheritances from a third person after the marriage (other than a matrimonial home), personal injury damages, life insurance proceeds and property excluded by a domestic contract. The exception is the matrimonial home: no deduction is allowed for its value on the marriage date, so its full value is shared even if one spouse owned it before the marriage.

A court can award more or less than half of the difference if equalizing would be unconscionable. An equalization claim must be started by the earliest of 2 years after the divorce, 6 years after separation with no reasonable prospect of living together again, or 6 months after the first spouse's death.