Public pensions have a long and diverse heritage, dating to at least the 11th century when they were introduced in China under Emperor Wang An-shih (1021-1086). However, in industrialized countries, the national, comprehensive pension systems of today have only emerged in the past 150 years or so.
Beginning in the late 18th century, industrialization occurred in many countries across Western Europe. The ways in which the resulting social problems were dealt with overseas provided ideas and examples for Canadians to draw upon.
Germany was the first Western country to adopt a national public pension program in 1889. Germany became a unified country only in 1871. In order to achieve the level of industrialization that most other European states enjoyed by this time, the German government, led by Chancellor Bismarck, took up a very high level of control over the country's economy.
Under Bismarck, a contributory pension plan was set up so that workers had the chance to pay into a pension fund throughout their working years. On retirement at age 65, they would then receive regular pension payments. This offered people the security they needed to leave family farms to work for wages, thus helping a large industrial workforce to develop quickly. Germany continued to lead the West in this area into the early 20th century, with innovations such as survivor benefits (introduced in 1911).
Despite Germany's advances in the area of public pensions, it was the British system of poor relief that had the most profound effect on the development of social welfare in English Canada.
In Britain, the Elizabethan Poor Law of 1601 created a local system for dealing with the poor, giving individual parishes responsibility for offering relief. The Poor Law Amendment Act of 1834 (also known as the New Poor Law) consolidated parishes into larger administrative units called poor law unions, but this was still a largely decentralized system.
The New Poor Law distinguished between the "undeserving" and "deserving" poor, and between "indoor" and "outdoor" relief. The "undeserving" poor were those considered capable of working, and they were subjected to "indoor" relief which meant being forced into a workhouse where they worked in exchange for meagre food and shelter. The undeserving poor were given enough relief to survive, but that also kept them poorer than the poorest workers. This was called the principle of "less eligibility", designed to encourage the able-bodied poor to work.
The "deserving" poor, on the other hand, included seniors, orphans, the sick and the disabled. Because they were unable to work, they were sometimes offered "outdoor" relief (given money directly), but sometimes they too had only the workhouse to turn to. Conditions for poor children known as the "Home Children" or "Barnardo Children" were so appalling that an organized movement developed to ship them en masse to the colonies (i.e., Canada, Australia, New Zealand) as indentured workers, in the hopes of improving their chance of survival. There was, of course, no such solution for the elderly.
By the 1880s, however, increasing numbers of people became aware of the problem of the elderly poor in Britain as more and more people who had worked their whole lives were forced, along with their spouses, into destitution and sometimes the workhouse. As more working-class men, and eventually women, won the right to vote, the plight of the elderly poor became an important political issue. In 1908, the British government took the first step by introducing a non-contributory pension program for all those over age 70 who qualified for it by passing a means test that assessed their wealth. A similar evolution of the franchise in Canada, as more people became eligible to vote, contributed to the development of this country's public pension system following the First World War.
The importance of the Catholic Church's role in poor relief in Quebec distinguished Quebec's social welfare system from those of other provinces in this period and well into the 20th century. This is because, beginning in 1774, when the British Parliament enacted the Quebec Act, the Catholic Church's prominent role in many aspects of social policy-making in that province was protected, including education and relief for the poor.
It is interesting to note that although Americans had a national military pension program after the Civil War, the American Constitution presented difficulties related to federal and state powers similar to those experienced in Canada. A national program was not achieved in the United States until 1935, when the American Social Security Act was enacted.