Labour at the forefront of CPP struggle.

This Month In Labour History
Project 2012, AFL
Tuesday, January 18, 2011

Canada's Pension Plan

Canada's first national pension scheme came into effect in 1927 thanks to Labour M.P.'s J.S. Woodsworth and Abraham Heaps who agreed to support Mackenzie King's minority government in exchange for the government passing the Old Age Pension Act. Under the new plan, both benefits and eligibility were quite limited so unions and like-minded groups fought for a universal, employment-based pension plan. The Canada Pension Plan (CPP) came into force in January 1966 resulting in a significant reduction in the poverty rate among seniors. Since then, improvements have been made, the most recent being the extension of benefits to same-sex and common law relationships.

Since it was created in 1966, unions have acted as watchdogs, defending it against attacks from those who do not agree with the concept of a universal publicly-funded program. Despite the rhetoric from a minority that oppose it, the CPP enjoys high levels of support from the vast majority of Canadians. Public sector unions such as CUPE have done studies showing Canadians continued to support CPP. Their 2010 Environics study showed that over 70 per cent of Canadians prefer a defined benefit plan, which guarantees a fixed amount of benefit when you retire, to a defined contribution plan, where the benefits paid out depend on the performance of the investments in the fund. In addition, over 80 per cent supported increasing benefit payments to seniors.