A newly published report places Canada nine positions lower on the international economic openness index than it stood just twelve months prior. The decline drew attention from Matthew Mitchell, a Fraser Institute senior fellow who contributed to the report as co-author.
According to the document, economic freedom captures the degree to which individuals can make their own decisions about consumption, employment, and entrepreneurship. Five components feed the index's final calculation: the ease with which goods move across borders, the weight of taxes and regulations on economic activity, the level of government expenditure, the robustness of property rights, and the degree to which a country's currency holds its value.
Three areas of measurement — the scale of government taxation and expenditure relative to the broader economy, the structure of business regulation, and the openness of cross-border trade — each weakened in ways that pulled Canada lower in the overall rankings. The report pointed to longstanding difficulties in controlling the scale of government as a recurring theme in Canada's fiscal history. Placed 101st among 165 countries in the latest index, the nation carries a tax burden and a level of public expenditure that together weigh on its overall standing.
For the latest index period, Hong Kong retained its position at the top of the global economic freedom rankings. Positions two through five on the index went to Switzerland, Singapore, New Zealand, and the United States, in that order. Positions six through nine belong to Ireland, Denmark, Australia, and Mauritius, while Finland, the Netherlands, and the United Kingdom share the tenth spot.
Positions 13 through 18 on the rankings were distributed across six nations, with Iceland and Japan sharing the 13th spot, Estonia and Luxembourg occupying 15th together, Taiwan slotting into 17th, and Canada one place further back at 18th. Ranked 19th and 20th on the final standings were Germany and Chile, respectively.
According to the report, measures put in place by governments during the COVID-19 pandemic — including new regulations, trade barriers, an expanded public sector, and monetary expansion to fund those changes — contributed to a contraction in economic freedom worldwide. The report also noted that while many administrations have moved to roll back those restrictions, the typical nation's level of economic openness has yet to recover to where it stood before the pandemic.
The research additionally noted an association between high economic-freedom rankings and populations that tend to report greater material wellbeing, broader access to political and civil rights, and longer average lifespans, though the findings reflect a correlation rather than an established causal link. In 2024, nations ranked among the most economically open posted an average income per head of roughly US$65,596, while those at the opposite end of the freedom index recorded a figure closer to US$9,552 — a gap of nearly seven to one between the two groups.
Nations placing within the uppermost quarter of the distribution also recorded poverty levels below the broader average. Among nations placed in the top quarter by economic freedom measures, roughly 2 in every 100 residents lived below the extreme poverty threshold — a rate that stood at around 41 in every 100 among those in the lowest-ranked quarter.
