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Alberta freest Canadian province, ranks 12th in North American; other provinces rank near bottom

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From the Fraser Institute

By: Dean Stansel, José Torra, Matthew D. Mitchell and Ángel Carrión-Tavárez

Alberta is, once again, the Canadian province with the highest level of economic freedom, while most other provinces rank in the bottom half in the annual Economic Freedom of North America report, published today by the Fraser Institute, an independent, non-partisan, public policy think-tank.

Individuals have more economic freedom when they are allowed to make more of their own economic decisions such as what to buy, where to work and how to start and run a business. And research shows that economic freedom is fundamental to prosperity.

The report ranks the provinces and states individually for each country (Canada, the U.S. and Mexico). In addition, there is a fourth measure comparing and ranking all states and provinces, across all three countries. All of the rankings measure government spending, taxation, regulations and labour market restrictions using data from 2022 (the latest year of available comparable data).

“Higher taxes, higher levels of government spending and overly burdensome regulations continue to depress economic freedom across much of Canada, which makes it harder for individuals and businesses to thrive and create jobs,” said Matthew Mitchell, a senior fellow at the Fraser Institute and co-author of this year’s report.

In the ranking covering all three countries, which includes both federal and provincial government policies, Alberta is once again the highest-ranking Canadian province. It tied four U.S. states at 12th, having improved its ranking from 41st last year.

The next freest province is British Columbia, which ranks 43rd out of 93, followed by Ontario (47th), Saskatchewan (50th), Manitoba (53rd) and Quebec (54th).

The four Atlantic provinces— New Brunswick (57th), Prince Edward Island (58th), Nova Scotia (59th) and Newfoundland and Labrador (60th)—have the lowest levels of economic freedom among all provinces and U.S. states, only outranking the Mexican states and Puerto Rico. New Hampshire, once again, earned the overall top spot amongst all provinces and states in the rankings this year.

“The link between economic freedom and prosperity is clear: people who live in provinces or states that have comparatively lower taxation, lower government, sound regulatory regimes and more flexible labor markets tend, on average, to live happier, healthier and wealthier lives,” Mitchell said.

For instance, according to the latest report, total income in the freest jurisdictions grew 29 per cent after adjusting for inflation over the last decade, while in the least-free jurisdictions, total inflation adjusted income fell 13 per cent.

The Economic Freedom of North America report (co-authored by Dean Stansel, José Torra and Ángel Carrión-Tavárez) is an offshoot of the Fraser Institute’s Economic Freedom of the World index, the result of more than a quarter century of work by more than 60 scholars including three Nobel laureates.

Detailed tables for each country and subnational jurisdiction can be found at www.freetheworld.org.

Economic Freedom of North America 2024

  • The indices in the Economic Freedom of North America 2024 measure the degree to which governments in North America permit their citizens to make their own economic choices.
  • They include data from the 10 Canadian provinces, 50 US states, 32 Mexican states, and the US territory of Puerto Rico.
  • In the all-government index—which takes account of federal as well as state/provincial policies—the most economically-free jurisdiction in North America is New Hampshire, followed by Idaho, Oklahoma and South Carolina tied for third, and Florida and Indiana tied for fifth.
  • The lowest-ranking jurisdictions are all Mexican states. In last place is Ciudad de México. Above that is Colima, Campeche, Tamaulipas, and Zacatecas.
  • Alberta is the highest-ranking Canadian province, tied for 12th place with Tennessee, South Dakota, Colorado, and Texas. The next-highest Canadian province is British Columbia, which is tied with Massachusetts, Minnesota, and New Mexico for 43rd.
  • Average economic freedom across all 93 jurisdictions has fallen every year since 2017 and is now slightly above its all-time low.
  • Incomes in the freest top 25 percent of North American jurisdictions were 21 times higher than in the least-free.
  • From 2013 to 2022 the population of the freest US states grew 10 times faster and total employment grew three times faster than in the least-free states.

 

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Business

It Took Trump To Get Canada Serious About Free Trade With Itself

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From the  Frontier Centre for Public Policy

By Lee Harding

Trump’s protectionism has jolted Canada into finally beginning to tear down interprovincial trade barriers

The threat of Donald Trump’s tariffs and the potential collapse of North American free trade have prompted Canada to look inward. With international trade under pressure, the country is—at last—taking meaningful steps to improve trade within its borders.

Canada’s Constitution gives provinces control over many key economic levers. While Ottawa manages international trade, the provinces regulate licensing, certification and procurement rules. These fragmented regulations have long acted as internal trade barriers, forcing companies and professionals to navigate duplicate approval processes when operating across provincial lines.

These restrictions increase costs, delay projects and limit job opportunities for businesses and workers. For consumers, they mean higher prices and fewer choices. Economists estimate that these barriers hold back up to $200 billion of Canada’s economy annually, roughly eight per cent of the country’s GDP.

Ironically, it wasn’t until after Canada signed the North American Free Trade Agreement that it began to address domestic trade restrictions. In 1994, the first ministers signed the Agreement on Internal Trade (AIT), committing to equal treatment of bidders on provincial and municipal contracts. Subsequent regional agreements, such as Alberta and British Columbia’s Trade, Investment and Labour Mobility Agreement in 2007, and the New West Partnership that followed, expanded cooperation to include broader credential recognition and enforceable dispute resolution.

In 2017, the Canadian Free Trade Agreement (CFTA) replaced the AIT to streamline trade among provinces and territories. While more ambitious in scope, the CFTA’s effectiveness has been limited by a patchwork of exemptions and slow implementation.

Now, however, Trump’s protectionism has reignited momentum to fix the problem. In recent months, provincial and territorial labour market ministers met with their federal counterpart to strengthen the CFTA. Their goal: to remove longstanding barriers and unlock the full potential of Canada’s internal market.

According to a March 5 CFTA press release, five governments have agreed to eliminate 40 exemptions they previously claimed for themselves. A June 1 deadline has been set to produce an action plan for nationwide mutual recognition of professional credentials. Ministers are also working on the mutual recognition of consumer goods, excluding food, so that if a product is approved for sale in one province, it can be sold anywhere in Canada without added red tape.

Ontario Premier Doug Ford has signalled that his province won’t wait for consensus. Ontario is dropping all its CFTA exemptions, allowing medical professionals to begin practising while awaiting registration with provincial regulators.

Ontario has partnered with Nova Scotia and New Brunswick to implement mutual recognition of goods, services and registered workers. These provinces have also enabled direct-to-consumer alcohol sales, letting individuals purchase alcohol directly from producers for personal consumption.

A joint CFTA statement says other provinces intend to follow suit, except Prince Edward Island and Newfoundland and Labrador.

These developments are long overdue. Confederation happened more than 150 years ago, and prohibition ended more than a century ago, yet Canadians still face barriers when trying to buy a bottle of wine from another province or find work across a provincial line.

Perhaps now, Canada will finally become the economic union it was always meant to be. Few would thank Donald Trump, but without his tariffs, this renewed urgency to break down internal trade barriers might never have emerged.

Lee Harding is a research fellow with the Frontier Centre for Public Policy.

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2025 Federal Election

Carney’s budget is worse than Trudeau’s

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By Gage Haubrich

Liberal Leader Mark Carney is planning to borrow more money than former prime minister Justin Trudeau.

That’s an odd plan for a former banker because the federal government is already spending more on debt interest payments than it spends on health-care transfers to the provinces.

Let’s take a deeper look at Carney’s plan.

Carney says that his government would “spend less, invest more.”

At first glance, that might sound better than the previous decade of massive deficits and increasing debt, but does that sound like a real change?

Because if you open a thesaurus, you’ll find that “spend” and “invest” are synonyms, they mean the same thing.

And Carney’s platform shows it. Carney plans to increase government spending by $130 billion. He plans to increase the federal debt by $225 billion over the next four years. That’s about $100 billion more than Trudeau was planning borrow over the same period, according to the most recent Fall Economic Statement.

Carney is planning to waste $5.6 billion more on debt interest charges than Trudeau. Interest charges already cost taxpayers more than $1 billion per week.

The platform claims that Carney will run a budget surplus in 2028, but that’s nonsense. Because once you include the $48 billion of spending in Carney’s “capital” budget, the tiny surplus disappears, and taxpayers are stuck with more debt.

And that’s despite planning to take even more money from Canadians in years ahead. Carney’s platform shows that his carbon tariff, another carbon tax on Canadians, will cost taxpayers $500 million.

The bottom line is that government spending, no matter what pile it is put into, is just government spending. And when the government spends too much, that means it must borrow more money, and taxpayers have to pay the interest payments on that irresponsible borrowing.

Canadians don’t even believe that Carney can follow through on his watered-down plan. A majority of Canadians are skeptical that Carney will balance the operational budget in three years, according to Leger polling.

All Carney’s plan means for Canadians is more borrowing and higher debt. And taxpayers can’t afford anymore debt.

When the Liberals were first elected the debt was $616 billion. It’s projected to reach almost $1.3 trillion by the end of the year, that means the debt has more than doubled in the last decade.

Every single Canadian’s individual share of the federal debt averages about $30,000.

Interest charges on the debt are costing taxpayers $53.7 billion this year. That’s more than the government takes in GST from Canadians. That means every time you go to the grocery store, fill up your car with gas, or buy almost anything else, all that federal sales tax you pay isn’t being used for anything but paying for the government’s poor financial decisions.

Creative accounting is not the solution to get the government’s fiscal house in order. It’s spending cuts. And Carney even says this.

“The federal government has been spending too much,” said Carney. He then went on to acknowledge the huge spending growth of the government over the last decade and the ballooning of the federal bureaucracy. A serious plan to balance the budget and pay down debt includes cutting spending and slashing bureaucracy.

But the Conservatives aren’t off the hook here either. Conservative Leader Pierre Poilievre has said that he will balance the budget “as soon as possible,” but hasn’t told taxpayers when that is.

More debt today means higher taxes tomorrow. That’s because every dollar borrowed by the federal government must be paid back plus interest. Any party that says it wants to make life more affordable also needs a plan to start paying back the debt.

Taxpayers need a government that will commit to balancing the budget for real and start paying back debt, not one that is continuing to pile on debt and waste billions on interest charges.

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