But Canadians' ability to make their own economic decisions is being eroded, report says
Being able to determine the best economic decisions for oneself is a key part of a free democracy, but are Canadians losing their economic freedom?
According to a new report from the Fraser Institute, they are.
The study analyzes the policies and institutions of 165 jurisdictions including those relating to regulation, freedom to trade internationally, size of government, legal systems and property rights, and sound monetary policy, to rank jurisdictions for their economic freedom.
Canada is in the top 10 for economic freedom, and gained in the most recent report which is based on 2021 data (the latest year where comparable data is available) but in one key metric is has seen a decline in recent years.
“In 2014, Canada ranked 71st in the size of government, its best historic ranking in this area, where lower rankings indicate taxation and spending. Due to its especially large COVD response, the country’s size of government ranking fell to 129th in 2020. It has now climbed back, but only to 99th place, Canada’s lowest ranking ever in size of government except for the COVID period,” said Fred McMahon, Dr. Michael A. Walker Research Chair in Economic Freedom with the Fraser Institute.
Canada has the 26th fastest growth rate of government across the full period, which should concern Canadians says McMahon: “as lower levels of economic freedom leads to slower economic growth and less investment.”
Hong Kong drops back
For the first time since the rankings were established in 1970, Hong Kong is no longer the most economically free jurisdiction, having been replaced by Singapore.
Switzerland, New Zealand, the United States, Ireland, Denmark, Australia, the United Kingdom, complete the top 10.
“Hong Kong’s recent turn is an example of how economic freedom is intimately connected with civil and political freedom. The Chinese government's aim was to crack down on political and civil dissent. These repressions, combined with the government’s efforts to control the private sector, inevitably led to diminished economic freedom. Hong Kong's prosperity will suffer as a result,” said Matthew Mitchell, senior fellow in the Centre for Economic Freedom at the Fraser Institute.
Venezuela once again ranks last.
