The division of assets and debts for couples separating or divorcing can be overwhelming.  Exchange of documents, valuing assets, protracted negotiations.  This article will help Alberta and Saskatchewan couples understand the basics of how property division works in each province.  Of course, it’s a very complex topic, but let’s give it a try to go through the principles.

What are the basics of division of assets and debts? 

In Alberta and Saskatchewan, subject to certain exemptions, Family Property is the property that is owned by either spouse or by the spouses jointly at the conclusion of their relationship.  Family Property will typically be divided 50/50 between spouses.

There are generally 5 steps to complete the division of assets and debts: 

• #1 – list all the assets, debts, and exemptions, 
• #2 – give a value to each item, 
• #3 – label which spouse intends to keep which asset or debt 
• #4 – calculate the total value of assets minus debts that each spouse will keep
• #5 – determine whether there’s any balancing that needs to occur between the spouses’ columns.

Given that the principle is 50/50 division of property between spouses, we can do one of a few options – for instance, one person can pay a settlement payment in cash to the other or one spouse can transfer property to the other in order to equalize the columns.

What types of assets and debts are “Family Property”?

It would be impossible to come up with a comprehensive list, but here are some examples:

Assets: 

• Real estate
• Corporate interests
• Bank accounts 
• Retirement and other investment accounts
• Vehicles and other motorized equipment
• Household contents including not only items within your house, but also tools, lawn care, and other equipment
• Collectibles, works of art, and other valuable property
• Life insurance policies if there’s a cash value

Debts: 

• Mortgages and other loans
• Lines of credit
• Credit card balances
• Debts owing to Canada Revenue Agency or other debt collectors

These are just a sample of the items that would need to be listed on your net worth statement.  The documentation to prove the value of these items needs to be shared with your former spouse.

Does province of residence matter? Alberta vs Saskatchewan?

Yes most definitely. 

Property division in Canada is regulated by the provinces, so although generally-speaking Alberta and Saskatchewan have a 50/50 split of family property on separation, the specifics of what is divided, what’s exempt, and how the regime works is different in each province. 

Generally, if you live in Alberta and have property in Alberta, you will use the Alberta property division regime.  Likewise, if you live in Saskatchewan the Saskatchewan legislation applies. 

Are there things that are not included in division of assets and debts? 

Yes – these are called “exemptions” – these are things that are not divided between spouses when they are separating.  In other words, one spouse gets to keep exempt assets for themselves.

Alberta and Saskatchewan each have different items that are listed within the “exempt” status.  Given our short time here, we can’t get into the specifics, but suffice it to say there’s a list for each province of items that are not shareable between spouses, or that are only partially shareable. 

If there are exempt items, the key is to ensure that you can trace that exemption from when it was received to where it is today – it may be money in a bank account that still exists, or it may be money that was received that has been used to purchase items that still exist.

Does it matter – married vs unmarried? 

Before January 1, 2020, it used to be that one of the huge differences between Alberta and Saskatchewan was how the law treated married versus unmarried cohabitating spouses.  

In Alberta:

Prior to January 1, 2020, there was no legislation that automatically entitled spouses to divide their property acquired during their relationship.  Such entitlement relied solely on judge-made law called “the law of unjust enrichment” – which is basically the principle that “it’s not fair” that one spouse would walk away with more of the family property, and so the spouse who wanted to share in the division of property had to sue the other spouse to apportion some property to them

Since January 1, 2020, the legislation in Alberta changed such that not only are legally married spouses entitled to divide their property on separation, so too are spouses who are living together and fall into the category of “adult interdependent partners” meaning basically that they’ve either lived together for 3 years, have a child together, or have contractually opt-in to this definition.  

In Saskatchewan: 

The law has for a long time been that people who are legally married as well as those who have lived together for at least 24 months are considered “spouses” under the legislation and can divide their family property between them.