Personal Finance  CHANNELS 
Archives By Location
Archives By Category
Community Reports
Archives By Specialty
S*P*O*U*S*E - what does it really mean to us?
by Stephen Horwood, B.Math.

There is, and likely always will be, 'the debate' on gay and lesbian spouses ... do we want to be recognised as spouses or not?  Well, the government is trying its best to reserve the word spouse and marriage, for that matter, for opposite-sex couples.

Speculating on what it could mean for gay and lesbian partners, there are many positive aspects.  Arguably the most significant benefit is the recognition as equals in this crazy world in which we live.  Of course there may be drawbacks.  Did you know that spouses can only own 1 'principle residence'?  Couples can own many residences but the tax implications vary depending on your family status.

One of the financial advantages of spouses is that RRSP investments can be transferred tax free to the other spouse upon the death of the first spouse.  This transfer can make a huge difference in taxes payable if one spouse has a significant sum of money in an RRSP upon death.  Go back a few years ... take 2 lesbian women who were partners, 1 has $100,000 in her RRSP.  If she were to pass away, her RRSP would be deemed to have been liquidated at her death and the gains on her RRSP could be taxed at roughly 50%.

The big question in my mind is, given the latest legislative amendments by the government of Ontario (in the M & H case), does this scenario change?  Could the surviving partner be considered a 'spouse' under the tax laws and thus able to receive the $100,000 RRSP tax free?

The answer is still fuzzy.  The Ontario Governments changes to the laws do not on the surface create equality for 'spouses' and 'same-sex partners.'  Laurie Arron, President of the national organization EGALE (Equality for Gays and Lesbians Everywhere) says:  "The Ontario government's discriminatory distinction in terminology sends a clear message that the Ontario government views same-sex relationships as inferior to opposite-sex relationships.  In a world in which our relationships are often denigrated, this distinction will be viewed by many as an affirmation of their prejudice.  In our view, this does not conform with the Supreme Court decision [in the M &H case]."

Laurie also noted that a 1998 Federal Court decision, involving EGALE Board member Dale Akerstrom (Attorney General of Canada v Moore & Akerstrom), has already decided that it is discriminatory to set up a separate definition for 'same-sex partners.'

So, it's off to court again to clarify the issue.  Eventually I believe the definition of spouse will be changed to include gay and lesbian couples, at which time we will be expected to accept the responsibilities as well as the benefits of being spouses.

Stephen Horwood is a Personal Financial Advisor with Money Concepts.  He may be contacted at  Tel: (888) 615-2130.  Fax: (613) 925-1063