The Fraser Institute's latest annual report reveals a stark contrast in economic freedom between Canada and the United States. While Alberta continues to hold the top spot among Canadian provinces, its standing has taken a significant tumble in the broader North American context.
Alberta's Dwindling Lead in North America
According to the think-tank's Economic Freedom of North America 2025 report, Alberta now finds itself tied for 30th place overall with the state of West Virginia. This marks a dramatic fall from its position last year, when it was tied for a much stronger 12th place alongside states like Tennessee and Texas.
The report, which has been published for nearly three decades, evaluates 10 Canadian provinces, all 50 U.S. states, Puerto Rico, and 32 Mexican states. It measures the extent to which governments allow individuals to make their own economic decisions, analyzing factors like government spending, taxation, and labour market regulations.
Canadian Provinces Lag Behind U.S. Counterparts
The data paints a challenging picture for Canada's economic competitiveness. Seven out of ten Canadian provinces now rank below all 50 U.S. states. The top jurisdictions for economic freedom are all American, led by New Hampshire, followed by South Dakota and Idaho tied for second.
British Columbia is the next highest Canadian province after Alberta, landing in 47th place. Ontario ranks 49th, sharing that spot with New York State. At the very bottom of the North American list is Newfoundland & Labrador, with other Maritime provinces like Prince Edward Island, Nova Scotia, and New Brunswick not far behind.
Shrinking Margins and a Warning from Researchers
Within Canada, Alberta maintains its long-held lead, but that advantage has been shrinking since 2014. The province's score of 6.44 out of 10 is now less than a point ahead of Ontario's 5.67. Quebec sits in last place nationally with a score of 3.10.
Matthew Mitchell, a senior fellow at the Fraser Institute and co-author of the report, issued a clear warning. "High taxes, high levels of government spending and overly-burdensome regulations continue to depress economic freedom across much of Canada, which makes it harder for businesses to thrive and create jobs," he stated.
The report also notes a concerning long-term trend: economic freedom has declined across North America this century, with major setbacks during the 2009 Great Recession and the 2020 pandemic. Overall, economic freedom on the continent is now lower than it was in 2011. The Fraser Institute emphasizes that this decline matters because regions with greater economic freedom tend to experience higher levels of prosperity and well-being for their citizens.