In Canada, personal financial information is jealously guarded, released only on a need-to-know basis and usually only on applications for credit. 

Not so when a family law dispute erupts.

Family law disputes, such as separations or divorces, usually result in one side initially asking the other, and then asking a court for child or spousal support and a determination and division of alleged family, matrimonial or jointly held assets.

When two spouses separate, and the above-mentioned issues have arisen, it is essential that they exchange sworn financial statements which includes a statement of their income, and other assets and liabilities, and other information that might be relevant to support such as special or extraordinary expenses. 

It is also essential that the statements be sworn. This may appear to be overkill and just an opportunity for some lawyer or notary to make money but the swearing of the statement puts a heavy onus on a person to tell the truth and exposes him or her to a charge of perjury should be information be intentionally deceptive.

Every Canadian jurisdiction, in some form or another, sets out the requirement of a financial statement and necessary attachments in the context of family law. The federal Child Support Guidelines (CSG), at §21 (extract), requires that any spouse:

"... who is applying for a child support order and whose income information is necessary to determine the amount of the order must include the following with the application:

"A copy of every personal income tax return filed by the spouse for each of the three most recent taxation years;

"A copy of every notice of assessment and reassessment issued to the spouse for each of the three most recent taxation years;

"Where the spouse is an employee, the most recent statement of earnings ... ;

"Where the spouse is self-employed, for the three most recent taxation years, the financial statements of the spouse’s business or professional practice ... ;

"Where the spouse controls a corporation, for its three most recent taxation years, the financial statements of the corporation and its subsidiaries ... ; and

"Where the spouse receives income from employment insurance, social assistance, a pension, workers compensation, disability payments or any other source, the most recent statement of income indicating the total amount of income from the applicable source during the current year...."

The consequences of failing to provide adequate financial information can be devastating. Most of the courts, when faced with a litigant who has failed to provide his basic financial disclosure, or who has provided false information, will not hesitate to utilize the power granted to it under §23 and 24 of the CSG:

"... Proceed to a hearing, in the course of which it may draw an adverse inference against the spouse and impute income to that spouse in such amount as it considers appropriate;

"Make a contempt order against the spouse;

"Strike out any of the spouse’s pleadings; and

"Award costs in favour of the other spouse up to an amount that fully compensates the other spouse for all costs incurred in the proceedings." 

In some jurisdictions, the failure to provide a financial statement may result in imprisonment (see, for example, §27(6) of Ontario’s Family Rules).

The financial statement is not supposed to be anything more than a snapshot of a person's financial situation. The information is sworn to be true as of a specific date. Note that some jurisdictions require that where there is a material change to a person's financial situation, they must provide the other side with an amended financial statement (for example Rule 60D(20) of BC’s Rules of Court). 

There is often a concurrent obligation pursuant to provincial legislation to provide identical information because of a matrimonial property dispute. For example, under the Family Law Act of Ontario (§8), if a separated spouse making a family property claim against the other, this triggers an obligation to exchange:

"... a statement verified by oath or statutory declaration disclosing particulars of ... the party’s property and debts and other liabilities, as of the date of the marriage, as of the valuation date, and as of the date of the statement ... and ...all property that the party disposed of during the two years immediately preceding the making of the statement, or during the marriage, whichever period is shorter."

Most of the times, it is most convenient to "kill two birds with one stone", and to prepare a single financial statement which includes the required information for both outstanding issues, support and matrimonial property.

In addition to setting out in positive law the details of mandatory financial disclosure, such as timelines, service, and the consequences of noncompliance, the provincial and territorial governments of Canada typically provide their respective populations with forms. 

These forms can be a real nightmare, so much so that most lawyers - theoretically thought to have the most familiarity with these forms - use "fill in the blanks" computer software programs to generate the completed forms.

For some reason or another, the publication of a easy-to-use form for a financial statement has been a real challenge for the judiciary and the provincial governments. Every few years, the form is changed. 

British Columbia has a form for the Provincial Court and a completely different form for use in Supreme Court. In both cases, contrary to the law of affidavits, the jurat comes at the beginning of the financial statement and not at the end.

The Provincial Court statement comes with comprehensive instructions and is much more user-friendly. 

There are usually four parts to a financial statement:

  • Particulars as to the affiant’s income and source of income (name of employer). In some situations, certain expenses may be deducted from a person's income for the purposes of support (eg. union fees).
  • Expenses, to be expressed as either "monthly" or "annual", and usually allowing for separate itemization of expenses specific to children. These include household, transportation, and personal expenses. To get a monthly or annual figures, you will need to have a calculator handy.
  • Assets and debts, including particulars such as the names of financial institutions and account numbers.
  • Special lists for itemizing on a per child basis, the alleged monthly special or extraordinary expenses or, in the event of a claim for undue hardship, the financial details of the alleged hardship such as the income of a second person in a household.

Often, I will give my clients a blank form and have them fill it out using a pencil. On that draft, I can then complete the final version. 

The attachments include tax returns and CRA’s notices of assessment for the last three tax years, the most recent paystub and property tax documents if any real property is owned.

It is my practice to include in financial statements other documents which would substantiate items in the financial statement which, although not required, get the evidence into the court file and readily available for settlement or litigation purposes. For example, I will often attach to a financial statement the most recent bank account, credit card or pension/RRSP statements, property tax, mortgage and insurance statements, statements in respect to utilities, and copies of vehicle registration papers. Do this cautiously, though, as it could come back to bite you if it is not necessary to your case.

This also formally discloses the document to the other side so there can be no allegation of document concealment or nondisclosure. From a comprehensive, well organized financial statement, the judge will get a good first impression that the affiant fully met his obligation to disclose financial particulars to the other side (and to the court).

Another useful attachment might be a proposed budget which, where spousal support is being requested, you can show the court how the money would be used. Ontario’s Form 13 actually has a proposed budget right in the form of the financial statement.

Remember that the audience for a financial statement is a judge. Keeping this in mind, I always boldly number the pages of the original financial statement numbering the first page "1" and so forth to the bottom of the last page, using a sharpie if I can't do it electronically. This makes it so much easier for everyone to follow as copies of the financial statement are used in settlement discussions or court.

Always write neatly. It is usually impossible to type within the small spaces provided on the forms and if you need to write, use block letters and write clearly. 

It is also important to organize the content although there is no hard and fast rule for this. My preference is to collate the attachments in the order suggested within the form, if any, and then in chronological order as much as possible.

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