What Is Equalization in Ontario and Who Has to Pay It?

Equalization is a payment of money from one spouse to the other that evens out what each of you built up during the marriage. The spouse with the lower net family property is entitled to one-half the difference between the two net family properties. It is not a split of each asset. The spouse with the larger total pays.

To calculate it, add up your property on the valuation date, the earliest of dates such as separation, divorce or death. Subtract debts, excluded property and your net property value on the date of marriage, except a matrimonial home, which counts in full; a negative result counts as zero; then halve the difference between the two totals. The idea behind it is that child care, household management and financial provision are joint responsibilities, and each spouse contributes equally, whether financially or otherwise.

Equalization applies to married spouses. Common-law couples are not legally required to split property acquired while living together, and there is no equalization for unmarried partners. The wider definition of spouse used for support does not give common-law partners equalization. A court can award more or less than half only if equalizing would be unconscionable.