Alberta Ranks in Top 12 for Economic Freedom in North America, Other Provinces Fall Below Top 40: Study

A couple walks through a park in downtown Calgary on May 17, 2023. The Canadian Press/Jeff McIntosh

Alberta is one of the most economically free jurisdictions in North America, although its advantage over other provinces has narrowed over the past decade, a new study suggests.

Alberta ranked 12th among 93 North American jurisdictions for residents’ freedom to make decisions on what to buy, where to work, and whether to start a business, according to the Fraser Institute’s newly released Economic Freedom of North America 2024 report, based on data from 2022.

The other provinces ranked significantly lower, meaning their residents have less freedom to make their own economic choices.

With a score of 8.1 out of 10, Alberta was tied for 12th place with Tennessee, South Dakota, Colorado, and Texas. This is the first time Alberta has ranked among the top 20 since 2016, when it fell out of the top tier after securing a place there for seven years.

“Governments can prevent people from making their own economic choices through regulations, taxes, barriers to trade, and manipulation of the value of money,” reads the report, authored by Dean Stansel, José Torra, Matthew D. Mitchell and Ángel Carrión-Tavárez.

“On the other hand, governments can safe-guard individual economic choice by protecting persons and their property from fraud or force.”

Alberta was also the highest-ranking Canadian province last year, although it ranked below the top 30, based on data from 2021. The second highest-ranked Canadian province was British Columbia, in 45th place.

For the study, researchers used an all-government index, which they say measures how federal policy may restrict the economic freedom of their residents. Some of its variables include each region’s legal systems and property rights, and their freedom to trade internationally.

B.C. was again the next Canadian province in the new ranking, tied for 43rd place with the U.S. states of Massachusetts, Minnesota, and New Mexico. It was followed by Ontario in 47th place and Saskatchewan in 50th place, tied with Alaska.

The Atlantic provinces were the lowest-ranked Canadian provinces, with New Brunswick in 57th, Prince Edward Island in 58th, Nova Scotia in 59th, and Newfoundland and Labrador in 60th place. They ranked below all 50 U.S. states but above all 32 Mexican states.

“High taxes, high levels of government spending and overly-burdensome regulations continue to depress economic freedom across Atlantic Canada, which makes it harder for businesses to thrive and create jobs,” said Matthew Mitchell, senior fellow at the Fraser Institute, in a press release.

Economic Freedom Within Canada

The authors also measured jurisdictions within the same country using different variables than the all-government index.

Alberta appeared to be the freest province in Canada in economic terms, maintaining the lead it has held for many years, according to the study. Ontario ranked second, while Manitoba placed third.

The authors noted that Alberta’s lead over other provinces has narrowed over the past decade.

Newfoundland and Labrador ranked higher in this category than in the all-government index, securing 4th place. Nova Scotia remained near the bottom, finishing second to last, while Quebec came last with nearly half of Alberta’s score.

According to the authors, economic freedom is closely related to human well-being. They noted that when a jurisdiction is more economically free, it tends to have higher per-capita income, higher life expectancy, faster economic growth, lower infant mortality, and better protection of civil and political liberties.

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