Equalization payments in Ontario involve splitting the difference in net family property (NFP) values between spouses

Under Ontario’s Family Law Act, equalization payments are calculated by determining each spouse’s net family property (NFP) at the date of separation. The NFP represents the growth in value of each spouse’s assets during the marriage, minus debts and liabilities. The spouse with the higher NFP must pay their former partner half of the difference between their respective NFP values.

• Calculate each spouse’s net family property on the separation date
• Subtract the lower NFP from the higher NFP
• Divide the difference by two to determine the equalization payment
• The spouse with the higher NFP pays this amount to their former partner