Canada’s State Has a Low Rank of Economic Freedom, Research Show

The state of Canada lags behind the state of the United States in economic freedom, the new report said.

Fred McMahon, co-author and resident fellow at the Fraser Institute, said: news release..

Report entitled “Economic Freedom in 2021 North America” ​​(pdf) Examine the policies of individual jurisdictions in North America, including 10 states in Canada, 50 states in the United States, and 32 states in Mexico to see how much they support financial freedom.

The report defines financial freedom as “the ability of an individual to make their own financial decisions about what to buy, where to work, and whether to start a business.” To understand the situation in individual jurisdictions, the author measured 10 variables in three areas: government spending, taxation, and labor market restrictions.

The report created two indexes. A subnational index that surveys states, states, and local governments in the same country, and an all-government index that compares the economic freedoms of the three countries.

Alberta, which ranked first for seven consecutive years, began to lag three years ago and is now tied in 33rd place with Oregon. Oil-rich states remain Canada’s highest-ranked states in the report.

“Alberta saw a change of power in 2019 and made some progress in policy changes, but there’s still a lot to do to make the state the most economically free jurisdiction in North America. There is, “says McMahon.

Seven of Canada’s ten states are ranked behind all 50 states in the United States. British Columbia is Canada’s 47th and second highest ranked state, followed by Ontario (52nd), Saskatchewan (54th), Manitoba (55th) and Quebec (56th). ..

The four states of the Atlantic are among all the states of New Brunswick (57th), Nova Scotia (58th), Newfoundland and Labrador (59th), Prince Edward Island (60th) and the United States. Has the lowest financial freedom in the state, surpassing only the state of Mexico.

“Governments across the region continue to curb economic freedom, which hinders economic growth and makes it more difficult for businesses to prosper and create jobs,” McMahon said. Another news release..

“As economic freedom declines across Canada, so does the economic outlook for Canadians and their families,” he said.

New Hampshire, USA, remains at the top of the list this year, followed by Florida and Idaho. The highest ranked state in Mexico is Baja California, followed by Nayarit and Tlaxcala.

The report states that the average score for economic freedom in all three countries peaked in 2004, but began to decline until around 2011. Since then, average economic freedom in North America has risen slowly, but has fallen below its 2004 peak.

The authors state that economic freedom at the local level is associated with many indicators of per capita economies of scale, economic growth, and various business activities.

For example, in 2019, the average per capita income of the most economically free quartile jurisdiction in the All Government Index was only $ 2,362, while the most economically free quartile is. It was $ 51,666. [page 17 of full report]

This also applies to the subnational index, where the least flexible quartiles have an average income per capita 1% lower than the national average, and the most flexible quartiles are 7.5% above the national average. increase.

In addition to McMahon, the Fraser Institute report was co-authored by Dean Stansel, an assistant professor at Southern Methodist University, and Jose Tora, head of research at Caminos de la Libertad. Economic freedom network..

The report is based on the latest comparable data for 2019 and does not capture the impact of the COVID-19 pandemic on economic freedom and government pandemic response policies.

Andrew Chen


Andrew Chen is a Toronto-based Epoch Times reporter.