The freedom to make choices about purchases, work, and starting a business have weakened
Canadians have lower levels of economic freedom than American peers, wherever they are in Canada, according to a new report.
The Fraser Institute’s annual assessment of how much freedom people have about what to buy, where to work and whether to start a business, shows that all Canadian provinces are now in the bottom half of the rankings for the first time.
The non-partisan think tank says that economic freedom is critical to prosperity and the latest analysis could signal bad news for economic growth in the years ahead.
“The trajectory of economic freedom in Canada could lead to weakness in economic growth and prosperity in the years ahead,” said Fred McMahon, the Dr. Michael A. Walker Research Chair in Economic Freedom at the Fraser Institute and co-author of the report.
The report, Economic Freedom of North America, measures government spending, taxation and labour market restrictions using data from 2021 (the latest year of available comparable data) and has two indexes: a sub-national index which measures restrictions on freedom at the province/state and local level and an all government index which adds federal restrictions.
“Since 2014, all Canadian provinces have suffered significant declines in economic freedom at the all-government level, while a majority of provinces also suffered declines at the subnational level,” McMahon added.
Alberta leads but declines
Alberta is the province enabling the greatest level of economic freedom, but this has been eroded.
In the all-government index, Alberta is now tied for 31st place out of 50 U.S. states, 32 Mexican states, 10 Canadian provinces, and the US territory of Puerto Rico. British Columbia is the second-highest ranked province (45th) followed by Ontario (50th), and Manitoba (54th).
Meanwhile, Nova Scotia (57th), Prince Edward Island and New Brunswick (tied for 58th), and Newfoundland and Labrador (60th) have the lowest levels of economic freedom among all provinces and U.S. states but outrank the Mexican states and Puerto Rico.
“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,” McMahon said.