People get married for many reasons. Ultimately, marriage is a partnership in which you care for someone, and they care for you, in some capacity. It is a civil and sometimes religiously recognized union of two people. There are many financial and legal benefits of marriage in Canada. But while there are perks, there are also responsibilities and obligations. Learn about the challenges and make sure you have conversations about your finances before marriage. Keep reading to learn more!
Table of contents
What is marriage?
Marriage in Canada is the federally recognized union of two adults. Furthermore, marriage is governed by the federal government under the Civil Marriage Act. The solemnization is regulated by the provinces and territories. Solemnization is also known as the formal marriage ceremony, either religious or civil. The Civil Marriage Act states, “Marriage, for civil purposes, is the lawful union of two persons to the exclusion of all others.” The act further requires the individuals to be able to consent to a marriage freely and knowingly.
Marriage is a major life decision that comes with benefits and obligations. Both the pros and cons of marriage should be explored. You must understand what a marriage truly means before you marry. There are many legal benefits of marriage in Canada, as we’ll explore further below.
Related Reading: Is Bitcoin Legal in Canada?
Your credit score & report. Always free, forever
It takes 3 minutes to join 20+ million people who trust ClearScore to help them improve their financial future
What are the legalities of marriage in Canada?
To legally get married in Canada, you must be older than 16 years of age. However, to marry at 16 or 17 you would need parental consent, of all parents. Once you reach the age of majority in your province of residence, you can legally marry. In most instances, 18 or 19 is the age of majority in all the provinces and territories in Canada. Where the year of majority is 19, the individual would need parental consent at 18 to marry.
Here is a breakdown of the age of majority by provinces and territories:
| 18 Years Old | 19 Years Old |
| Alberta | British Columbia |
| Saskatchewan | Nova Scotia |
| Manitoba | Newfoundland and Labrador |
| Ontario | Yukon |
| Quebec | Northwest Territories |
| New Brunswick | Nunavut |
| Prince Edward Island |
Being the age of majority, or having parental consent and being at least 16 years old, are the main requirements for legal marriage. You must also not currently be married. Meaning, any previous marriages must already be dissolved. This normally happens through divorce or death. In other words, legally divorced individuals and widows can remarry. Although, proof of the previous partner’s death or proof of divorce or dissolution of a union may be required to get a new marriage license.
A final necessary element for marriage is that you must be able to consent to a marriage. Part of this comes from being the age of majority. However, it also suggests you must be aware of the ceremony and the outcome. Meaning, you cannot be forced to get married, this would be invalid. You must also understand what is happening for a marriage to be valid. This means a fake or acted wedding cannot suddenly produce a valid marriage. Additionally, you must be of sound mind and have the capacity to understand what is happening.
Common Law Partnerships
Common law partnerships are a form of marital status. Technically, its definition is governed by each province and territory. However, for federal tax purposes, there is a simple common-law partnership definition. The general federal tax definition of common-law partnerships is two persons living together in a conjugal relationship for 12 continuous months or more. Two persons living together in a conjugal relationship and who share a child by birth or adoption would also be considered living in common law. For tax purposes, living in common-law has the same benefits as marriage.
Common law partnerships can impose different legal obligations and complications in each province. Common Law in Canada: What It Means In Each Province is a great article that explores this in-depth. Furthermore, common-law partnerships carry many of the same legal benefits of marriage in Canada.
Related Reading: Common Law vs Marriage
Get the lowest mortgage rates and mortgage rate holds in Canada
What are the tax benefits of marriage in Canada?
Every Canadian must file their income tax return and pay taxes, or claim a refund. There are some tax advantages for married couples, as we’ll explore in depth below.
Spousal tax credit
Spousal tax credit benefits spouses or common law partners who have a large disparity in their incomes. Specifically, when one partner earns below the basic personal amount. The partner who earns well above the basic personal amount may claim a non-refundable tax credit. This would be in the amount of any of their partner’s unused basic personal amount.
For example, in 2023, the basic personal amount is $15,000. If there is only one income earner in the household, the income earner can carry over their partner’s used basic personal amount. Considering they would have a net income of $0, the entire $15,000 could be used as a spousal tax credit. The specific amount used and saved depends on the tax bracket of the earning partner.
Joint medical expenses
Married couples can join all their medical expenses onto a single partner’s tax return. This would allow them to hit the minimum required to get a tax credit for any medical expenses. Suddenly, getting a medical expense tax credit is easier. It also results in a larger credit. The maximum benefit of this tax credit is gained when the lower-income earner claims the medical expenses. This is because the credit is based on expenses compared to the percentage of the income on the return.
Your credit score & report. Always free, forever
It takes 3 minutes to join 20+ million people who trust ClearScore to help them improve their financial future
Joint charitable donation tax credit
Married couples can also join their charitable donations onto a single partner’s tax return. For donations, tax credits increase with the total value of donations made. This can create a potentially huge tax credit when combining a married couple’s donation over a year.
Related Reading: Charitable Donation Tax Credit
Childcare expenses
Childcare expenses can be deducted from income, if a married or common law couple have kids. All the details on childcare expenses are on the Government of Canada’s website. The spouse who earns less money must claim childcare expenses.
Pension income splitting
Pension income splitting is the act of splitting any pension income. Furthermore, pension income normally begins during retirement. This allows a spouse with a higher pension to transfer some of their earnings onto their spouse’s tax return. This would place them both in a lower overall tax bracket.
Related Reading: Best Pension Plans in Canada
Transfer tax credits
Certain tax credits can be carried over to your spouse. This allows you to maximize credits, instead of them going unused. Age amount, pension income amount, disability amount, tuition amount, and caregiver amount are some of the transferable credits.
Registered Retirement Savings Plans (RRSPs)
Spousal RRSP allows high-income earners to pay any remaining contributions on lower-income earners’ tax returns. This lowers the higher-income earner’s overall tax bracket. This is a highly advantaged tax planning strategy for married couples.
Get the lowest mortgage rates and mortgage rate holds in Canada
Split investment earnings
Spouses can split investment earnings between their tax returns. This helps lower the overall tax bracket by positioning married couples’ income more evenly. Although, investments must be jointly held. The CRA can even audit for proof investments were contributed to by both parties. This means that, technically speaking, couples should only distribute investment revenues within the percentages each contributed to the investment. Investments earnings can come from jointly owned, stocks, property, or other assets.
Related Reading: How to Buy Stocks
Do married couples have to file taxes together?
Everyone in Canada must file their taxes individually. Canada does not have a joint tax return system, unfortunately. However, married couples must report that they are married and their spouse’s net income. Even if your spouse’s income is zero, it must be reported on your tax return. Reporting your marital status and your spouse’s income helps calculate federal benefits and credit. Most tax benefits and credits are income-based, making your spouse’s income information important.
What information about your spouse must be on your tax return:
- Your spouse’s full name
- Your spouse’s Social Insurance Number (SIN)
- Their net income for the year
What are the legal benefits of marriage in Canada?
Many of the legal benefits of marriage in Canada revolve heavily around taxation and the sharing of finances. However, there are some additional legal benefits to marriage.
Estate planning
It is important to create a will. This helps determine how you would like your assets distributed upon your death. Without a will, any living spouse is prioritized in law when it comes to estate and remaining assets. Children are also heavily prioritized. However, it is important regardless of marriage to ensure you have a will.
Related Reading: Estate Planning Checklist For Canadians
Employment benefits
Many employers have survivor benefits for spouses should a spouse pass away while on the job. This could include an insurance payout, health benefits, and retirement payments to the surviving spouse. Further, many employers offer promotions and benefits to spouses of their staff.
Additional health benefits and insurance
While Canada has universal healthcare, many employers offer extended health benefits. Extended health benefits can include your spouse. In a situation with two spouses with extended health benefits through their employer, this could be an immense benefit.
Increased saving and borrowing options
Banks offer many products designed for retirement or savings for married couples. While many accounts can be jointly opened and contributed by any two parties. There are some products designed specifically for married or life partners. Specifically, being married increases your ability to take out loans, mortgages or other products. Banks take into consideration household income, and this increases your borrowing power.
What are the pros and cons of getting married?
Pros of getting married
- Significant tax benefits
- Shared cost of living expenses
- Increased borrowing power
- Legal protections of your spouse; concerning estate and health matters
- Ease of retirement planning
- Shared extended health insurance
- Easier family planning
- Lifelong companionship
Cons of getting married
- Financial and legal obligations for your spouse
- Shared assets and debts
- Prenups and wills should be created
- Possible complications at separation or divorce, should it occur
- Increased complexity for tax filings
- Difficulty navigating shared finances
Considerations of Financial & Legal Benefits of Marriage in Canada
Marriage is a very big life step. It involves significant financial and legal obligations to another person. To many, it is a lifelong commitment and perhaps the most important decision you make in your lifetime. In recent years, many marriages experience separations and divorces. It is something to be considered seriously before making the commitment.
There are many financial and legal benefits of marriage in Canada. You must be ready to have a serious financial and legal conversation with your potential spouse. If you have difficulties discussing or agreeing, marriage might not be the best move in your relationship. But if you’re aligned with your finances and legal approach, then go for it!
Read More: Estate Taxes in Canada