AuthorAri Kaplan/Mitch Frazer
This chapter describes some key events in the history and development
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 twentiet h century, formally constituted pen sion plans
were few and far between, and the concept of the employment pen-
sion as an enforceable legal right simply did not exist. The doctrine of
individual respon sibility, which characterized employment during the
industrial revolution, produced the “four fears” of working life: sicknes s,
unemployment, old age, and death. As Morton and McCallum describe,
“old age was a misery chief‌ly evaded by early deat h.1 During this period,
the presumption was that breadw inners worked until they no longer
1 D Morton & M McCallum, “Supe rannuation to Indexation: Employ ment
Pensions in the P ublic and Private Sector in Can ada, 1870–1970” in Task Force
on Inf‌lation Protectio n for Employment Pension Plans, Research Stu dies, Volume 1
(Toronto: Queen’s Printer, 1988) at 4.
Foundations 37
could, and relied on support from family members and handouts from
religious, immigrant, fraternal, mutual and other ch aritable organiza-
tions,2 and trade 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 oered 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 determin ing the amount of pension benef‌it.
c) Pension Fund Societies Act
At about the same time as the federal Govern ment introduced its f‌irst civil
service plan, Parli ament, in order to promote private initiative, adopted,
in 1887, the Act to empower the employees of incorporated companies to
establish Pension Fund Societies,4 later constituted as the Pension Fund
Societies Act.5 Pension societies were st atutory veh icles which ad minis-
tered pension schemes under which employers could purchase pen sions
for their employees from the state, and, later, from insurance companie s.
A noteworthy requirement of a pension society was that 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 wit h in the Act itself, but
were provided for in accordance with the term s 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
2 Morton & McCallum, ibi d at 5. National societies and frat ernal orders included
the Orange Lo dge, the St George Society, and the Hibern ians.
3 The Toronto Typograph ical Union was one of the f‌irst to pay be nef‌its to its sick
and aging membe rs: 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 Act to empower the e mployees of incorporated com panies to establish Pension Fund
Societies, SC 1887, c 21.
5 Pen sion Fund Societies Act, RSC 1906, c 123 (Rev).
6 For more on pension fund societies , see C Deniger, Le fondement histor ique du
partage en équité d e l’excédent d’actifs de s caisses de retraite (LLM Thesis, Facult é
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, a’d [1926] 3 DLR 988 (PC).
Superannuation Act, 1870 was initial ly an employee-only contributory
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
employer contributions to the scheme.
The legislation’s long title described its objective: An Act for Better
Ensuring the Eciency of the Civil Service of Canada, by Providing for
the Superannuation of Persons Employed Therein in Certain Cases.8 The
nascent civil service plan was less s ubtly described during t he House
of Commons debates as enabling “the Govern ment to get rid of persons
who had arrived at a time of li fe when they could no longer perform
their work eciently.9
2) The Interwar Years
a) Introduction
By 1900, there were approximately twelve employer-sponsored retire-
ment plans in Canada. The inter-bellum period saw the beginnings of
a Canadian pen sion system in the introduction of government pen-
sions and a rise in t he development of retirement plans sponsored by
b) Old Age Pensions Act
The concept of a minimum level of post-retirement sustenance, as a mat-
ter of public policy, became normalized in 1927 when the Government
of Canada introduced the Old Age Pensions Act. The Old Age Pension
(OAP) was a social benef‌it oered to eligible persons over age seventy,
and was more or less unrelated to employment and ba sed on means.
With strict residency requi rements10 and an income test that supposed
assistance from children and income from property, it was more akin
to today’s social welfare programs than a tr ue pension.
In 1952, the government replaced the OAP with the Old Age Security
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).
8 An Act for Better Ensuring the Ecie ncy of the Civil Service of Canada, b y Providing
for the Superannuation of Perso ns Employed Therein in Certain Cases, SC 1870, c 4.
9 Hou se of Commons Debates (16 April 1870) at 1054.
10 To qualify, a pers on had to be at least seventy year s old, and a British subject
(or the widow of someone who had been a Br itish subject), and to have lived in
Canada for at lea st twenty years, and in the pr ovince where they were applying
for the previous f‌ive yea rs.

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