In its latest Economic Freedom of North America 2023 report, the Fraser Institute delivers a damning verdict on Canada’s economic freedom.
For the first time, every Canadian province has been ranked in the bottom half among North American jurisdictions when it comes to economic freedom.
Using comprehensive data from 2021, the report examines the extent to which North American regional policies support economic freedom.
The Fraser Institute defines economic freedom as “the ability of individuals to act in the economic sphere free of undue restrictions” based on two different indices across 92 jurisdictions across the continent.
The subnational index focuses only on a single country’s provincial, state, and local government level while the all-government index includes the provincial, state, and local government levels and federal government policies.
Alberta ranked as the highest-ranking Canadian province under the all-government index, yet it only ties for 31st place with Connecticut in the U.S., scoring 7.90 out of 10. This is a substantial fall from its previous top position.
Alberta had previously ranked at the top of the index for seven years before falling out of that spot in the Fraser Institute’s 2018 report, which reflected data from 2016.
The 2018 report said, “Starting in 2015, Canada and Alberta elected new political leaders who have been making changes in taxation, spending, and regulation that are already having a significant effect on their economic freedom.”
British Columbia follows at 45th, with Ontario and Manitoba further behind at 50th and 54th.
Alarmingly, seven Canadian provinces rank below all 50 U.S. states. This includes Newfoundland & Labrador at 60th, trailing behind provinces like Prince Edward Island and New Brunswick tied at 58th, and Nova Scotia at 57th.
“Since 2014, all Canadian provinces have suffered significant declines in economic freedom at the all-government level, while a majority of provinces also suffered decline at the subnational level,” said Fred McMahon, the Dr. Michael A. Walker Research Chair in Economic Freedom at the Fraser Institute and co-author of this year’s Economic Freedom of North America report, in a press release.
The subnational index, focusing on individual Canadian jurisdictions, also echoes this downturn. Alberta again leads, but the gap between provinces is stark. Quebec, for instance, is the least free, with a score of 2.67, demonstrating significant disparities in economic freedom within Canada.
“Higher levels of economic freedom lead to more opportunity and more prosperity, so as economic freedom wanes, the prospects also diminish for Canadians and their families,” said McMahon.
“The trajectory of economic freedom in Canada could lead to weakness in economic growth and prosperity in years ahead.”