Canada’s level of economic freedom has declined, according to the Economic Freedom of the World report released recently by the Fraser Institute.
The annual report ranked Canada 11th globally in 2023, down from 8th the previous year. The report measures economic freedom by examining factors such as openness to trade, tax and regulatory burdens, government spending, protection of property, and the soundness of a country’s currency.
“Canadians should understand that when people are more economically free, they enjoy higher standards of living,” said Matthew Mitchell, senior fellow at the Fraser Institute and contributor to the report.
Matthew Mitchell
The Vancouver-based think-tank noted that one key reason for Canada’s lower ranking was the country’s performance on the size of government. In 2014, Canada ranked 71st globally on that measure, its best result to date. During the COVID-19 pandemic, increased government spending and regulations contributed to a drop to 125th in 2020. While it improved to 93rd last year, Canada fell back to 102nd in the latest data.
The 2023 report, which reflects the most recent available data, does not account for impacts from the ongoing global trade war. However, it includes a dedicated chapter on how the conflict may affect economic freedom in the United States.
Hong Kong maintained the top global ranking, despite a declining score each year since 2018. Other rankings include the United States (5th), United Kingdom (13th), Germany (15th), Japan (17th), and France (44th). Russia ranked 148th, while Venezuela was the lowest-ranked country.
According to the report, people in countries with higher levels of economic freedom tend to experience greater prosperity, more political and civil liberties, and longer life expectancy.
In 2023, the average per-person GDP in the most economically free quartile of countries was US$66,434, compared to US$10,751 in the least-free quartile. The report also found that extreme poverty affected only two per cent of people in the freest nations, compared to 52 per cent in the least-free.
“Where people are free to pursue their own opportunities and make their own choices, they lead more prosperous, happier and healthier lives,” Mitchell said.
The Fraser Institute describes itself as an independent Canadian public policy research and educational organization with offices in Vancouver, Calgary, Toronto and Montreal.
Mario Toneguzzi
Mario Toneguzzi is Managing Editor of Canada’s Entrepreneur. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He was named in 2021 and 2024 as one of the top business journalists in the world by PR News. He was also named by RETHINK to its global list of Top Retail Experts 2024 and 2025.
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