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Happy marriages stand in contrast to acrimonious divorces. Everyone knows that couples break up for any number of reasons, but love often doesn’t come into it. Instead, it’s economic factors that are influencing whether a husband and wife stay together forever.
It may surprise you that divorce rates have fallen heavily, with just 43,000 divorces granted in Canada in 2020, the latest year for which data is available. In short, it’s also the lowest number since 1973, ending the idea that we’re living in an era of fast marriage and divorce cycles.
But what impact are economic factors having, especially in Ontario, where the cost of living is on everybody’s minds?
Where Canadians and Ontarians Stand on Marriage and Divorce
Marriage and divorce rates have followed a similar trend. Both are in decline as fewer Canadians marry and fewer break up.
According to the Vanier Institute of the Family, divorce rates have been experiencing a steady decline since the early 1990s. It should banish the myth that half of all marriages end in divorce. Ontario has also followed the same trend, with 12.2 out of every 1,000 married Canadians divorcing between 1991 and 1995, to 7.2 between 2016 and 2020.
It’s all a far cry from the 97,773 divorces reported in 1987, which remains the high point even today. But before we start assuming that faith in the institution of marriage has been restored, we also see the number of marriages decline generally.
The stats reveal that just 98,355 new marriages were registered in 2020, the lowest total since 1938. Fewer marriages mean fewer divorces. Granted, the latest numbers come from the first year of the COVID-19 pandemic, but the trends and numbers don’t differ substantially from the years before or after.
Young Canadians are Failing to Fly the Nest
Alarm bells have been ringing for some time regarding the cost of living, with Ontario remaining the most expensive province in Canada, followed closely by British Columbia. With prices outpacing wages, many Ontarians are simply finding the idea of marriage, and even independence, an impossible dream in the first place.
A Toronto Star report reveals that between October 2022 and 2024, the average two-bedroom rental in Ontario rose in price by 12.8%. It’s leading to a situation where Ontarians cannot even hope to live away from their parents, which places a natural barrier in front of the prospect of marriage.
An inability for young people to get married means an inability to get divorced, hence why marriage and divorce rates are moving in the same direction.
Unfortunately, the issue is getting worse. Recent data shows that 35.1% of Canadians under 34 still live with at least one parent. And this has increased by 5% nationwide between 2001 and 2021, with significant increases also seen in our priciest cities, including Toronto.
It’s become so bad that Canadians rely on the Bank of Mum and Dad to even buy homes. However, that’s a luxury, with adults having to co-own their homes alongside their parents. Coldwell Banker Horizon Realty revealed that 60% of young adults co-own with parents, with Toronto and Vancouver boasting the highest rates.
So, if Ontarians can’t even fly the nest, it’s no surprise that divorce rates will be declining.
Money and Relationships in Marriage – How Finance Impacts Ontario Divorce Rates
Economic factors also impact divorce rates in relationships. Many don’t like to admit it, but financial incompatibility is one of the leading sources of stress and conflict within the marital household.
We looked to the RBC 2024 Relationships & Money Poll for insights into how money impacts relationships. Here are the leading findings:
- 55% of couples said they needed to be in a relationship to pay for their lifestyle, indicating that the overall cost of living crisis is an enormous influencer.
- Three-quarters of couples polled claimed that money was a source of stress in their relationship.
- Three in five couples said money was a cause of arguments.
- 23% of people said that speaking to their partner about their finances had never been more stressful, showing that many are simply trying to bury their heads in the sand. And approximately 20% said they avoided talking about money entirely.
All of this indicates that couples aren’t aligned in their views on finance. Naturally, the problem is getting worse because of Ontario’s high cost of living. Recent studies have shown that three in five Ontarians are worried about their ability to repay their debts, and around half are within $200 of insolvency, with a third already insolvent.
It’s clear that this should be driving divorce rates higher, yet they’re falling, so why are those couples who haven’t divorced demonstrating more resiliency than ever?
The Soaring Cost of Divorce – Ontarians Forced to Stay Together
Divorce can be a complex process, with divisions of assets and post-break-up conflicts attracting high legal costs. Aside from that, there are logistical issues of couples going their separate ways and at least one party finding another place to live.
The Canadian Lawyer Magazine found that contested divorce costs range from $7,500 to $25,000. However, these are the most recent figures, and they’re from 2021, so expect this range to be higher today.
Professor Sorin Rizeanu from the University of Victoria’s School of Business said that divorce itself is expensive, and finding adequate housing as a newly single person is often even more expensive. It’s why Ontarians may well be staying together even when they’re not happy with their marriage.
The Daily Press reported that as many as 14% of couples were actively unhappy in their marriage, with 19% rarely or never having intimate relations. And there’s a good chance that the real number is higher.
High divorce rates would be the natural outcome when examining Ontario’s economic situation and how couples react to it. But if we look at the actual divorce process, which is rarely as simple as signing papers, we see that divorce is as beyond reach for many Canadians as marriage is for many young people.
Staying Together for the Money – Can Married Ontarians Survive Divorce?
No reliable data exists on how many Ontarians want to divorce but can’t for financial reasons. Instead, we have to look at an average situation and estimate what the fallout could look like.
Let’s take Liam, an average retail worker in his 50s living somewhere in Ontario. He boasts an average salary of $50,330, providing him with $3,435 in monthly pay after taxes. Liam does okay with his soon-to-be ex-wife, but he’s not a top performer, either.
Liam’s biggest problem will be housing if he leaves the family home. An average one-bedroom apartment in Toronto rents at $2,302 per month in 2024, far above what he can realistically afford.
Even if he can get another job or use his savings, the reality is that Liam will only be just surviving. Assuming his ex-wife is of the same age and has a similar income, both will be locked in as renters for the rest of their lives. In most cities in Ontario, no retail worker can afford to do anything but rent.
However, let’s say his ex-wife gave up the family home, and Liam was left with it. He will still have a six-figure outstanding mortgage balance. In 2024, outstanding mortgage debts were $434,090.
You don’t need to do the calculations to see that his salary alone wouldn’t be enough to cover the mortgage payments. Even an amortization could prevent Liam from being forced to sell up and move into rented accommodation, but it wouldn’t leave him much better off than just renting.
Either way, Liam would be spending anywhere from half to two-thirds of his post-tax income to avoid living on the street. None of these accounts for other living costs, including food, transit, and utilities. Throw kids and child support into the mix, and Liam and his ex-wife will both be in trouble.
These simple calculations illustrate that even when Ontarians are no longer in love, going through a divorce doesn’t make financial sense for anybody. Not only would it reduce their quality of life, but they would also struggle to survive.
The problem is worse for older Canadians who have limited years of career progression ahead of them. And, so, we find ourselves in a situation whereby younger Canadians are too broke to marry and move away, and older Canadians are too broke to risk the financial catastrophe that is divorce.
Gender Disparity – The Marriage Money Trap
Both genders bear a significant financial burden from divorce, but women tend to take the biggest brunt.
The Canadian Women’s Foundation found that a woman’s pre-tax income is 21% lower than a man’s. It matters because it means women are often less able to cope with the financial fallout of divorce, unless they immediately remarry, move in with parents, or have other forms of financial support.
It’s a situation that is borne out by research. It’s estimated that a woman’s median income falls by 38% in the year of separation. In contrast, men experience just a 10% drop in their income during the year of separation.
Why is there such a disparity in income loss due to divorce? In theory, the income loss should be similar, even though the outright numbers differ, but it all goes back to traditional gender roles. With an unequal share in child-rearing and other household responsibilities, women are more likely to work fewer hours and take more career breaks.
Plenty of anecdotes exist about women who felt like they couldn’t afford to separate from their partners. However, there are no firm figures regarding how many women are refusing to divorce because they’re worried about the dollars in their pockets.
Conclusion: How Economic Factors Have Changed Divorce Rates
Economic factors are a looming shadow over both marriages and divorces. We’ve found that the cost of living and a lack of disposable income prevent Canadians from marrying and unhappy couples from divorcing.
Ontario is notorious for its high cost of living, with Toronto being the most expensive city nationwide. In reality, all we’re seeing is the same trends playing out as we do in a major recession. Although Canada isn’t in the death grip of a financial crisis, similar economic patterns for ordinary Ontarians are playing out, and we’re seeing the drop in divorce rates to match.
Unlike other recessions, the lack of new marriages means we may not see a spike in divorces once the situation improves. Instead, we might actually see a net gain in marriages. However, only time will tell whether that prediction plays out accordingly.
If you’re worried about the costs of divorce or you’re ready to write the next chapter in your life, it’s time to get some expert guidance on your side. To learn more about simple, streamlined divorces, contact Simple Divorce for your free consultation today.
