When was the Canada Pension Plan introduced?

The Canada Pension Plan (CPP) came into force on January 1, 1966 under Lester B. Pearson's Liberal government, providing earnings-related retirement, disability, and survivor benefits to Canadian workers and self-employed persons. The federal Canada Pension Plan Act (13 Elizabeth II, c. 51) had received royal assent on April 1, 1965 and provided for the plan's implementation in stages from 1966. The parallel Quebec Pension Plan (QPP) also took effect on January 1, 1966 under provincial legislation. The CPP/QPP system is the largest single retirement income programme in Canada.

Before the CPP, Canadian retirement income consisted of the federal Old Age Security pension (introduced by Louis St. Laurent's government on January 1, 1952 under the Old Age Security Act of 1951, providing a flat-rate pension to all Canadians aged 70 and older), and a patchwork of employer-sponsored pensions, private savings, and means-tested provincial supplements. The OAS pension provided basic income support but was not earnings-related. The federal-provincial CPP negotiations of 1963 to 1965 were complex, with Quebec under Premier Jean Lesage demanding a separate Quebec plan and the right to invest QPP funds for provincial economic development.

The CPP/QPP design has core elements: compulsory participation by all employed and self-employed workers aged 18 to 65; contribution rate (3.6 per cent each from employer and employee in 1966, gradually increased to 11.9 per cent total in 2024); earnings-related benefits (a maximum monthly retirement pension that adjusts annually with inflation, about 1,365 dollars per month at 65 in 2024); disability and survivor benefits; portability across provinces; and full vesting after as little as one year of contributions. The OAS pension continues alongside the CPP and provides basic income support to Canadians 65 and older (eligibility was lowered from 70 to 65 in stages between 1966 and 1972).

The CPP investment philosophy was conservative until the 1990s. CPP contributions were originally invested in non-marketable federal and provincial bonds at below-market rates. The CPP Investment Board (CPPIB), established December 1997 to manage the CPP's reserve fund, transformed CPP investing through diversified market investments. CPPIB managed about 632 billion dollars in 2024, making it one of the world's largest pension funds. The Quebec Pension Plan is similarly managed by the Caisse de dépôt et placement du Québec (established 1965, manages about 480 billion dollars in 2024). The CPP has been incrementally enhanced, including a major expansion through the 2016 federal-provincial agreement (the CPP Enhancement, in force from 2019). The CPP/QPP system remains the largest single source of retirement income for most Canadians.