The period between 1928 and 1951 was characterized by severe economic changes caused by the Great Depression and the Second World War. The Depression years showed people how quickly poverty could affect the entire country. As a result, when the war came to an end in 1945 more Canadians than ever came to favour a government that would improve Canada's social welfare system so that social security could become a basic entitlement for all.
Shortly after the passage of the Old Age Pensions Act in 1927, Canada was plunged into the worst economic crisis in modern history, the Great Depression. Severe nationwide unemployment and poverty resulted. To save money, many people waited longer to get married and had fewer children. This caused the number of young people to decline, so that the percentage of older people in Canadian society grew. At the same time, these older people lived longer because of improvements in hygiene and health care.The life expectancy of men and women improved steadily after the Great Depression, in large part due to the improvement in medical technology.
F.H. Leacy, ed.,Historical Statistics of Canada, 2nd Edition (Ottawa, 1983) Series B65-75
As unemployment grew and wages fell, the Depression also took away many people's ability to save money for retirement. After the economy recovered, many older people who had lost their jobs in the 1930s found themselves with no money to supplement their Old Age Pension benefits. Even many farmers lacked security. By this time, large numbers of farms had been converted to produce only cash crops in an effort to make them more profitable. This left the farm families dependent on the money made from selling their goods and unable to grow their own food.
While seniors continued to suffer financially into the 1940s, the outbreak of the Second World War helped the Canadian economy to recover significantly. The severe unemployment of the Depression years was replaced with almost full employment, and in many industries workers became increasingly difficult to find. Increases in income and prices at this time led to an increase in inflation. For seniors who relied on the fixed amounts of money provided by the Old Age Pension, private pensions or government annuities, inflation was very harmful as it reduced the real value of their pensions.
The contrast between the general economic prosperity of the war years and the declining economic status of the aged grew to trouble many people. As the government assumed control of the economy during the war in order to meet the needs of the war effort (as it had done in the First World War), many social advocates across the country began to call for greater public support for seniors. This grew as older Canadians continued to suffer the effects of high prices in the aftermath of the war.
Increased public sympathy and respect for those no longer able to work could be seen in the growing unpopularity, as expressed in newspapers and other public arenas, of the means test imposed on old age pensioners. It was also in 1946 that the title "senior citizens" was proposed by the provincial legislature of British Columbia to underline the importance of viewing older people as citizens with all the same rights as other Canadians. (James G. Snell,The Citizen's Wage; The State and the Elderly in Canada: 1900-1951. Toronto, 1996, pp.210-211.) This support contributed to the government's decision to reform the pension system in 1951 by introducing Old Age Security and Old Age Assistance to replace the Old Age Pension.