In the 1930s, the economy collapsed and
unemployment soared. The Depression showed how quickly poverty could
afflict the entire country and this made a lasting impression on
Canadians.
The Old Age Pension of 1927 provided the elderly poor with some relief. The
program gradually included more people, such as blind persons, but
eligibility remained limited and seniors had to pass a degrading "means test".
The pension became increasingly unpopular when provincial legislation
was used to back up the means test:
- To qualify for assistance, parents had to prove that their children
could not support them.
- Officials even encouraged some elderly parents to sue their children
for maintenance.
- Recipients' eligibility could be withdrawn after they had begun
receiving pension payments.
- Payments were even recovered through claims against the estate of dead
recipients.
In 1939, Canada's entry into the Second World War put people back to
work and breathed new life into the economy. These good economic times,
however, were not as favourable for seniors, whose pensions were devalued
because of inflation. The contrast between the prosperous and the aged
poor and the memory of the Depression inspired many people to propose a
new national system of social security. Political parties, unions, seniors
and social interest groups urged the elimination of the means test and the
establishment of policies to protect all Canadians from extreme
poverty.
Unemployment Insurance and Family Allowances were introduced in the
1940s to assist workers and families. In 1951, the Constitution was
amended to allow the federal government to pass theOld Age Security
Act. The Act, which took effect in January 1952, established a
federally funded pension for all men and women 70 years of age and
over.
What happened next?
Compare with today
The "Means Test":
The "means test" was used to determine a senior's income, or means.
The test involved provincial pension authorities
calculating all aspects of a senior's income (e.g., pensions, income from
boarding house operations, etc.) as well as the value of "perks" they
received, such as free room and board. The means test, however, did not
take into account how much money a person needed to pay for food, shelter,
clothing, fuel, utilities or household supplies.
If a senior's annual income, including pensions, was
greater than $365, he or she was not eligible for the Old Age Pension. The
income each received determined the amount of assistance to which he or
she was entitled.
The problem, however, was there was no specific way to
calculate a senior's income. Provincial pension authorities had extensive
discretion, so the calculations were inconsistent and varied greatly from
province to province. For example, some calculations were based on the
assumption of income from property when, in fact, such income did not
exist. The value of free room and board varied depending on the province.
Because a senior's income depended on where he or she lived, some seniors
were denied assistance while others received widely varying amounts.