When someone dies without a will, or a will cannot be located, or is located but is deemed invalid, the person is said to have died intestate. Provincial laws deal with this situation, as each province has a potential interest in the deceased person's estate.
The assets owned by the deceased at time of death are known as that person's estate. Any debts the person owed need to be paid out of the estate, and anything remaining (the "residue" of the estate) can be divided among the heirs of the deceased person. Note that taxes are a debt.
So far, this is the same as what happens when someone dies with a valid will. The difference is, when you die with a valid will, distribution is usually done by the person you appointed as your executor, according to the wishes you expressed in your will.
When a person dies intestate, family members may apply to the courts to act as the estate administrator (sometimes know as the estate trustee). If the court provides a certificate of appointment, the administrator must identify and settle all debts in the estate. If anything remains, the administrator must then determine how to divide the residue and must try to locate and obtain the agreement to the division from legal heirs (the usual order or priority is: spouse, children, parents, brothers and sisters, and more distant family such as nieces and nephews).
If no member of the immediate family of the deceased is willing to act as administrator, or none is able to take on the task, then the court may appoint a trust company to undertake the task.
If the assets of he deceased person have some value, the risk of conflicts among potential heirs is high. In the absence of a will, the individual acting as the administrator of the estate is likely to be confronted with emotional claims ("I was always her favorite", or "He promised me I would get ...") and there is a strong possibility that cooperation in the process will not happen.
Write your will! We all like to think we will live a long time, and many of us have a superstitious fear of preparing a will. Reality, however, dictates that accidents and sudden, fatal illness will take some people much sooner than anyone would have predicted.
Once you start acquiring assets of value — a home, a pension plan, investments, and similar — you should prepare your first will. Review your will once a year after you write it (a good time is when you are doing your annual tax return and thinking about your assets), and update it as needed.
A small effort on your part may save your family a lot of unnecessary pain and conflict.