Statistics Canada released its latest divorce report in 2022, using data that it aggregated from 2020.
So what is the divorce rate in Canada?
Currently, the crude divorce rate in 2020 in Canada is 5.6 divorced people per 1,000 married persons surveyed, which is relatively low compared to other Western countries. In 2020, there were 42,933 divorces in Canada. This is a big decrease from the 56,937 divorces in 2019.
The divorce rate is the lowest that it’s been since 1973. Although an increasing number of divorce filings are mutual and come from both parties, divorce can still have a negative effect on both you and your former spouse’s finances.
Below, I’ll show you important stats about divorce rates in Canada and explain some of the financial risks associated with getting a divorce.
Recently, the Toronto Sun noted that Canada has the 29th highest divorce rate among 87 countries surveyed (which is still fairly low). According to the Statistics Canada report I mentioned above, there were 42,933 divorce filings registered in 2020.
One of the more interesting things to note is that the divorce rate in Canada has fallen significantly since 1990 when the crude divorce rate was 12.2 per 1,000.
From a provincial standpoint, the number of divorces between 2019 and 2020 also fell in every province except for the Northwest Territories, where the divorce rate stayed the same.
Given that it’s Canada’s largest province, it should be no surprise that Ontario has the highest number of divorces in Canada. In 2020 alone, 14,223 couples filed for divorce (and this was a decrease from the previous year).
Here’s a detailed look at the latest number of divorces per province in 2020:
|Canadian Province||Number of Divorces (2020)|
|Newfoundland and Labrador||618|
|Prince Edward Island||204|
As you can see by looking at the list, Canada’s outlying territories have significantly fewer divorces, which is largely due to the fact that these regions are sparsely populated. They’re also under-served as far as legal services go, which can make getting a divorce rather complicated.
In the past, it was more common to see divorces among younger couples. This was likely due to the fact that young marriage was more common in the 70s, 80s, and 90s than it is today. Modern couples are waiting until they’re older before committing to a married relationship.
According to Statistics Canada, the average age that Canadians get married today is 30.
Couples who wait until they’re older and more responsible to get married often tend to stick together for longer, as they’ve had more time to work on themselves and consider their decision to get married.
Currently, the average Canadian marriage lasts 15.3 years. This is up several years from 1980 when the average marriage length was 12.5 years.
On an emotional level, divorces are rarely ever simple and easy. Although I’ve never had to go through one myself (as I’m not married), I’ve known several friends who’ve gone through rough divorces.
As an observer, I’ve noticed several key ways that a divorce can affect an individual’s personal finances. Some of the most common effects I’ve noticed include:
- Court and lawyer fees associated with a divorce filing
- Separating living expenses
- Losing a portion of your investments and assets (this is a BIG one)
- Negative impact on your credit score
- Child support payments
- Negative impact to the childrens’ financial future
Although you aren’t required to hire a lawyer to help with your divorce, the majority of divorce applicants receive outside consultation from a lawyer specializing in family law. Divorce lawyers ensure that each party is treated fairly and is able to take full advantage of any federal or provincial separation and divorce laws.
Often, if one applicant hires a lawyer, the other spouse will hire a lawyer as well to ensure that they’re not getting the short end of the stick. Each lawyer will have a chance to present their client’s case before a judge, who will make a final ruling about the divorce and what’s going to be split.
There’s just one problem – all of this costs money.
Lawyers do not come cheap, and typically charge anywhere from $80 to $120 per hour. The time you spend talking or texting on the phone is also counted towards your hourly bill.
If you and your soon-to-be ex-spouse can’t come to an agreement on terms, then you’ll have to continue paying your lawyers to renegotiate the terms. This, of course, will incur additional expenses.
If you live in a mansion, then maybe you and your spouse will have enough space to stand living in the same space. However, the majority of my friends who went through a divorce were quick to find a separate living arrangement.
In addition to the obvious discomfort associated with living alongside the person you’re divorcing, most provinces have laws that govern how long a couple must be separated for before their divorce can be approved.
If prior to the divorce filing, you operated as a single-income (or primarily single-income) household, then this can create some immediate problems.
If you’re the primary earner, then you may be generous enough to provide your spouse with an allowance to cover their separate living arrangement. If not, then the non-primary earner will have to find a way of increasing their income so that they can live independently.
In either case, the financial impact of doubling your living expenses and moving from a single living space to two separate living spaces can drastically impact both applicants’ finances.
According to Canadian law, any investments or assets accumulated during the marriage are considered common property. If you and your partner can’t come to agreeable terms about how to split the investments and assets, then the judge will split them in half at their discretion.
This could mean losing half of your:
- Stock investments
- Joint retirement savings
- Standard savings
- Cryptocurrency investments
The judge may take into account which party contributed more towards the shared assets. However, one person will inevitably end up losing more than they expected. This can affect your income, your future retirement, and even your credit.
This brings us to the next negative impact of divorce in Canada – the impact to your credit score. Although filing for divorce doesn’t directly affect your credit score, the splitting of investments, assets, and accounts could have a very negative effect on your credit report.
As you sell off assets and separate accounts, the amount of your available credit, debt-to-income ratio, and other key credit metrics can all be affected. In some cases, going through a divorce could cause your credit to drop by up to 100 points or more.
This is why I always advocate that divorcing couples come to fair, agreeable terms that result in the fewest sudden account changes. This will ensure that both divorcees sustain minimum impact on their credit and can restart their lives and relationships on better financial terms.
Many divorces require the father of the children (or the primary earner) to provide child support to the primary caretaker of the children (which is most often the mother). Child support payments may not be fair and can often be disproportionate compared to the primary earner’s income.
The psychological effects of divorce on children are well documented. But then again, so are the psychological effects of an unhappy couple that feels forced to stay together.
However, a divorce can also negatively affect the child’s financial future and ability to pay for their education. As each of the parents may be struggling to recover their own personal finances, they may find it difficult to continue contributing to their child’s RESP education savings account.
Also, the child’s expenses, which may have been previously split, will now be paid for separately, which could leave one parent carrying a greater financial burden.
In Canada, the law states that a couple must be separated for a minimum of one-year before their divorce filing is approved. The only exception to this rule are divorces that are filed for on the grounds of adultery, abuse, or cruelty. In these cases, a divorce may be filed as quickly as 30 days.
Hopefully, you now have a better idea of what the divorce rate in Canada is and how a divorce can affect your personal finances. To wrap up, here are some quick answers to some of the most commonly asked divorce questions I’ve heard.
Yes. You are not legally required to work with a lawyer to file for divorce. If you and your spouse can come to agreeable terms and get them signed in writing, then there may be little need for a lawyer. This is often the case in marriages where both parties are independent, work full time, and have separate accounts.
According to the federal Divorce Act, both parents have an equal right to see their children for an equal amount of time. Unless the courts say otherwise or one parent files legal action against the other, parents are left to make their own custody arrangements.
That being said, if you fear you may not receive fair treatment from the other parent, it may be a good idea to get a judge to mandate set custody terms.
Canada has a relatively low divorce rate compared to the US and other European countries. Statistics Canada admits that this could be skewed due to the fact that COVID-19 impacted people’s ability to think about things like divorce in 2020. So, there may be an increase over the next few years.
Going through a divorce can significantly impact your retirement plan. To learn more about how to adjust your retirement plan, read my conclusive guide to retirement planning in Canada next!