AuthorAri Kaplan, Mitch Frazer
This chapter describe s some key events in the history and evolution of
pension law and regulation in Canada, with a signi f‌icant focus on the
Ontario regulatory regime.
1) Pre-Twentieth Century
a) Doctrine of individual responsibil ity
At the turn of the twentieth ce ntury, formally-constituted pen sion plans
were few and far between, and the concept of the employment pension
as an enforceable legal right simply did not exist. The doctr ine of in-
dividual responsibility, which characterized employment during the
industrial revolution, produced the “four fears” of working life: sick-
ness, unemployment, old age, and death. As Morton and McCallum de-
scribe, “old age was a misery chief‌ly evaded by early death.”1 During
this period, t he presumption was that breadwinners worked until they
1 D Morton & M McCallum, “Supe rannuation to Indexation: Employ ment Pen-
sions in the Publ ic and Private Sector in Can ada, 1870–1970” in Task Force on
Inf‌lation Protection for Emp loyment Pension Plans, Research Stu dies, Volume 1
(Toronto: Queen’s Printer, 1988) at 4.
Foundations 37
no longer could, and relied on support from family members and hand-
outs from religious, immigra nt, fraternal, mutual and other charitable
organizations,2 and t rade unions.3
b) Early employment plans
The f‌irst notable employment-based retirement scheme was introduced
in 1821 by Canada’s oldest corporation, Hudson’s Bay Company (HBC).
HBC’s plan was a prof‌it-sharing arr angement that offered discretion-
ary payments to pensioners of the company. In 1874, the Grand Trunk
Railway (later Can adian National) established what might be descr ibed
as the f‌irst private-sector retirement plan that included quasi-objective
criteria for determining the amount of pension benef‌it.
c) Pension Fund Societies Act
At about the same time as the federal Govern ment introduced its f‌irst
civil serv ice plan. Parliament, in order to promote private initiative, ad-
opted, in 1887, the Act to empower the employees of incorporated companies
to establish Pension Fund Societies,4 later constituted as the Pen sion Fu nd
Societies Act.5 Pension soc ieties were st atutory vehicle s which adminis-
tered pension schemes under which employers could purchase pen sions
for their employees from the state, and, later, from insurance companies.
A noteworthy requirement of a pension society was th at the revenues of
the fund could not revert to the employer.6 Priorities in the event of the
wind up of a pension society were not dealt with i n the Act itself, but
were provided for in accordance with the terms of the society’s bylaws.7
d) The Superannuation Act, 1870
One of the earliest publicly-sponsored retirement schemes in Canada
was established by the federal government for its civil servants. The
Superannuation Act, 1870 was initi ally an employee-only contributory
2 Morton & McCallum, ib id at 5. National societies and frat ernal orders included
the Orange Lo dge, the St George Society, and the Hibern ians.
3 The Toronto Typog raphical Union was one of the f‌irst to p ay benef‌its to its sick
and aging memb ers: see Sally F Zerker, The Rise and Fall of the Toronto Typo-
graphical Union, 1832–1972: A Case Study of Foreign Domination (Toronto: Univer-
sity of Toronto Press, 1982).
4 SC 1887, c 21.
5 RSC 1906, c 123 (Rev.).
6 For more on pension fund societie s, see C Deniger, Le fondement histor ique du
partage en équité d e l’excéde nt d’actifs des caisses de retraite (LLM Thesis, Fac ulté
des études supé rieures, Université de Montréa l, 1994) [unpublished].
7 See Re Pensions Fund Soc iety of La Banque Nationale, [1925] 4 DLR 97, [1925]
SCR 698, aff ’d [1926] 3 DLR 988 (PC).
plan that provided a 2 percent benef‌it to employees hav ing a maximum
of thirty-f‌ive years of ser vice. In 1912, the government introduced em-
ployer contributions to the scheme.
The legislation’s long title described its objective: An Act for Better
Ensuring the Eff‌iciency of the Civil Service of Canada, by Providing for
the Superannuation of Persons Employed Therein in Certain Cases.8 The
nascent civil ser vice plan was less subtly described during the House
of Commons debates as enabling “the Govern ment to get rid of persons
who had arrived at a time of life when they could no longer perform
their work eff‌iciently.”9
2) The Interwar Years
a) Introduction
By 1900, there were approximately twelve employer-sponsored retirement
plans in Canad a. The inter-bellum period saw the beginnings of a Cana-
dian pension system in t he introduction of government pensions and a
rise in the development of retirement plans spon sored by employers.
b) Old Age Pensions Act
The concept of a minimum level of post-retirement sustenance, as a
matter of public policy, became a normative principle in 1927 when the
Government of Canada introduced the Old Age Pensions Act. The Old
Age Pension (OAP) was a social benef‌it offered to eligible persons over
age seventy, and was more or less unrelated to employment and based
on means. With strict re sidency requirements10 and an i ncome test that
supposed assistance from children and income from property, it was
more akin to today’s social welfare programs than a t rue pension.
In 1952, the government replaced the OAP with the Old Age Secur-
ity Act. The Old Age Security (OAS) benef‌it eliminated the means test
for persons over age seventy (although it remained for those between
ages sixty-f‌ive and seventy).
c) Public sector retirement schemes
The 1920s gave rise to employment pension plans in the broader public
sector in Ontario, Quebec, Briti sh Columbia, and Alberta. By the end
8 SC 1870, c 4.
9 Ho use of Commons Debates (16 April 1870) at 1054.
10 To qualif y, a person had to be at le ast seventy years old, and a Br itish subject
(or the widow of someone who had been a B ritish subject), and to have lived in
Canada for at lea st twenty years, and in th e province where they were applying
for the previous f‌ive yea rs.

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