How is a business valued in an Ontario equalization calculation?

If one or both spouses own a business, the business interest is an asset that must be valued as of the valuation date and included in that spouse's net family property. Business valuation is one of the most contested areas in equalization disputes because businesses — especially private ones — do not have a readily observable market price.

Valuation experts (CBVs — Chartered Business Valuators) are typically retained to provide a fair market value opinion. They may use income-based approaches (capitalizing earnings), asset-based approaches, or market comparisons. The parties sometimes retain competing experts and then negotiate or let a court decide.

Only the portion of the business value attributable to the marriage period is fully in play — pre-marriage value can be deducted. If the business was started during the marriage, its full value at separation typically enters the calculation. Early, candid disclosure of business financials tends to reduce costs compared to adversarial valuation proceedings.