The Canada Pension Plan (“CPP”) requires a division of credits upon marriage breakdown, with credits earned during the marriage being divided equally between the spouses. While the CPP allows spouses to agree that the credits not be divided where a provincial statute expressly permits such agreements, Ontario has not enacted permissive legislation. This has led to a difficulty, at least in theory, in that CPP credits would appear to fall within the FLA definition of “family property”, making them subject to that Act’s equalization regime, even though they are also subject to mandatory division under the federal statute. It appears that the difficulty is largely ignored in practice, with CPP credits simply being omitted from the calculation of net family property. Nevertheless, this does raise the question of whether Ontario should enact legislation expressly excluding such credits from net family property, or at least allowing the parties to agree that they not be divided under the CPP.
B. Common Law Spouses
Part I of the FLA does not apply to couples who are in a common law relationship. The LCO does not intend in this report to address the issue of whether they should be, as that is an issue that goes beyond pensions. We would note, however, that common law couples who experience relationship breakdown may have property issues to deal with (as where a constructive trust is imposed in respect of an asset belonging to one partner in favour of the other) and that in any case some couples may wish to achieve (or at any rate, approach) equalization simply out of a sense of what is fair. To the extent, however, that division of one partner’s pension is contemplated, they would face the same problem stemming from a lack of settlement options as married couples face.
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