Canada slips to 18th in global economic freedom rankings

Canada has dropped significantly in the global ranking of economic freedom, falling from 9th place in 2023 to 18th in 2024, according to the latest Economic Freedom of the World report by the Fraser Institute. The report, which relies on 2024 data, measures economic freedom by evaluating factors such as openness to trade, tax and regulatory burdens, government spending, property rights, and the soundness of a country's money.

The decline in Canada's ranking was primarily driven by three areas: the size of government (taxation and spending as a share of the economy), regulation, and freedom to trade internationally. The largest drop was in freedom to trade. While Canada's legal system and property rights score remained virtually unchanged, its sound money score improved as inflation eased.

Matthew Mitchell, senior fellow at the Fraser Institute, warned that Canadians should be concerned because reduced economic freedom tends to lower living standards. The report highlights that Canada has struggled with a high tax burden and government spending for decades, placing it at 101st out of 165 countries in this category.

The report also notes that economic freedom is closely linked to prosperity, political and civil liberties, and longer life expectancy. For example, in 2024, per-person GDP in the top 25% of economically free countries was US$65,596, compared to US$9,552 in the least-free countries. Poverty rates and life expectancy also vary significantly between these groups.