More than one in 10 pupils in Quebec has been forced to hand over money or valuables by their peers, according to the province's public security minister, Serge Menard.
He announced that $1.25 million (pound;500,000) will be spent on tackling the problem.
His report, based on a survey of 16,600 students, found that 11.2 per cent are direct victims. Six per cent admitted to stealing metro passes, bank cards and belongings.
Students will now be encouraged to report incidents to authorities immediately. More than 40 per cent of such acts occur in or around schools.
Jacques Brodeur, a Quebec City consultant in media awareness and violence prevention, was not surprised by the numbers.
"I meet teenagers and kids every week who have been telling me this. Frequently, they hear "Give me your money or I'm going to punch you in the nose", or witness someone being "taxed".
"Kids don't want to report on bullies, because they fear being rejected by their peers. We have to realise that kids are being raised in an environment in which cruel and humiliating language, like the kind seen on South Park, has become the norm - and that the video games kids play affect their ability to make moral judgments."