Sign Up For Our Mailing Lists


InsiderOnline Blog: October 2013

Canada Is Still Beating the United States

For the eighth year running, the United States has less economic freedom than Canada, according to the Fraser Institute’s latest Economic Freedom of the World Report. Jared Meyer notes some of the reasons for the gap:

Canada has a federal corporate tax rate of just 15 percent whereas the United States has a top rate of 35 percent, the highest among OECD countries. Canada’s federal debt-to-GDP ratio is 35 percent. It is targeting a ratio of 25 percent by 2021 thanks to a strong commitment to spending cuts from Conservative Party Prime Minister Stephen Harper. The U.S. ratio is 73 percent and rising. Mr. Harper has publicly pushed for approval of the Keystone XL Pipeline, which would benefit the economies of both countries, while President Obama has done all he can to block the State Department’s permit. Canada also has an unemployment rate of 7.1 percent, lower than America’s.

From 1980 until 2000 the United States was generally rated the third freest country behind only Hong Kong and Singapore. Now it is #17. It is not only developed countries, such as New Zealand (#3), Switzerland (#4), and Finland (#7), overtaking the United States—developing countries are catching up. America’s ranking fell 10.5 percent from 2000 to 2011. Over that same period the world’s economic freedom rose by two percent. This is not a good sign for the future of America in an age of global competition.

U.S. rankings fell from the previous year in every category. According to Fred McMahon of the Fraser Institute, a co-author of the Index with Robert Lawson and Joshua Hall, the main factors that brought down America’s scores were overspending, weakened rule of law, and regulatory overkill.

If the United States continues to lag in economic freedom, its standard of living will also fall below those of the more economically free countries: “Those people living in the freest quartile of countries produce a GDP per capita that is on average eight times larger than those in the least free quartile. They produce two times as much per capita as those in the second freest quartile.” [Economics 21, October 9]

Posted on 10/08/13 06:25 PM by Alex Adrianson

Heritage FoundationInsiderOnline is a product of The Heritage Foundation.
214 Massachusetts Avenue NE | Washington DC 20002-4999
ph 202.546.4400 | fax 202.546.8328
© 1995 - 2014 The Heritage Foundation