More recently, we made some major changes to our public pension system. The Canada and Quebec Pension Plans were established in 1966 using a "pay-as-you-go" system. But changing demographics put pressure on the plans, as they are doing in Europe. By 1996, the federal and provincial governments agreed to changes that would put the Canada and Quebec Pension Plans on a firmer footing.
This meant some restructuring of benefits and a sharp increase in contributions - moves that were not popular, but they were certainly necessary. The Canada and Quebec Pension Plans now generate surpluses that represent almost 1 per cent of GDP. These are set aside in special funds that cannot be touched by governments for general use.