Back in the 1960s, Lester B. Pearson instituted Canada's 40-hour work week as well as 2 weeks vacation and a new minimum wage. However, his motivations for doing so at that time are not clear to me. What were the current events of the time that may have motivated Pearson to make this change?
There's a general thesis, called "Fordism" which contains a two pronged argument on a global phenomena in the advanced capitalist societies:
Employers in specific wanted higher quality and stable labour supplies, and so voluntarily offered permanent work; and, generally wanted educated and healthy workers. But they wouldn't use pay signals to get these.
Which meant that capital-in-general, usually in the form of the more "progressive" of the standard parties would need to force all of the capitals-in-specific to behave in certain ways. This accounts for the introduction of OHS, hours, retirement, health access, free education to year 11/12, etc.
Following this thesis, the Canadian Liberals would have been pushed by specific (more progressive) capitals, and by labour to modify capitalism to meet this urge for quality labour. The question specific to Canada, in this frame, would be why it took until, or was achieved so early, in 1960. In societies similar to Canadian society, the 40 hour week was achieved between 20 years earlier and 20 years later than 1960.
Pearson was the leader of the Canadian Liberal Party. Since WW2 the Liberals had been pushing a progressive platform. Actually the whole nation's mood had become more progressive, which was why the Conservative Party was renamed Progressive Conservatives. So when Pearson got into power, he created these socialist measures because its what the party wanted and what the voters wanted. It's no mystery.