Both Panasonic ZS3 and Canon S95 have 10.0 MP resolution sensors but Panasonic ZS3's sensor is 1/2.3-inch (6.08 x 4.56 mm ) and Canon S95's sensor is 1/1.7-inch (7.44 x 5.58 mm ).
Since Canon S95's has a larger sensor area with the same resolution, this means that it also has a larger pixel area hence better light collecting capacity for a given aperture compared to Panasonic ZS3.
Below you can see the ZS3 and S95 sensor size comparison.
As seen above, Canon S95 has a 1.5x Larger sensor area than Panasonic ZS3. Larger sensors give photographer more control on the depth of field and blurry background compared to smaller sensor when shot in same focal length and aperture.