Canada ranks in top 10 for economic freedom, new study shows

Canadians may complain about high taxes and house prices, but we live in one of the most economically free countries in the world, according to a new study.

Canada ranked 6^th in the 20^th annual Index of Economic Freedom, handily beating out the U.S. but behind countries such as first-place Hong Kong, second-place Singapore and third-place Australia. Canada’s ranking is the same as last year, but its overall score improved.

“Canada has solidified its status as a free economy, thanks to improvement in investment freedom, the management of public spending and monetary policy,” says the index put together by the Heritage Foundation and the Wall Street Journal.

For the purposes of the index, economic freedom is described as the “fundamental right” of people to control their own labour and property.

“In an economically free society, individuals are free to work, produce, consume and invest in any way they please,” the editors of the index write.

With a score of 80.2, up 0.8 from last year, Canada is one of just six economies worldwide ranked as “free,” according to the results.

Canada received its highest score in property rights (90), business freedom (89.3) and trade freedom (88.3).

Since the index started two decades ago, Canada has boosted its economic freedom score by 10.7 points, the biggest improvement among developed countries.

“A transparent and stable business climate makes Canada one of the world’s most attractive investment destinations,” says the report.

It cites in particular Canada’s stable financial system, which bankers, policymakers and politicians have been bragging about since the end of the last recession.

The U.S., which fell out of the Top 10 rankings down to 12^th spot this year, is considered “mostly free,” according to the index. Its ranking was driven by declines in fiscal and business freedom and property rights.

North Korea ranked at the bottom of the list of 178 countries in the index, Zimbabwe was second-worst and Venezuela rounded out the three least-free nations.

Overall, economic freedom is “on the rise” around the world, according the report.

It says the average global score of 60.3 is slightly above last year’s results, and the highest in the history of the index.

“The strongly positive relationship between economic freedom and prosperity is apparent throughout the world,” says the report, noting the per-capita incomes are higher in economically free nations.

Among the 178 countries ranked, 114 saw their scores rise, while 59 declined.

Still, when it comes to the global population, about 65 per cent are living “unfree,” and 27 economies have repressed economies with scores below 50.

“Free” countries are those with a score of 80 or higher, “moderately free” score between 60 and 69.9 and “mostly unfree” between 50 to 50.9).

The world’s most-improved country in this year’s index was Burma, which rose 7.3 points, but still remains repressed with a score of 46.5.