Canada has moved up to take its place among the Top 5 most economically free economies in the world, according to a report by the right-leaning think tank the Fraser Institute.
In its annual Economic Freedom of the World report, the Fraser Institute ranks countries based on policies that encourage economic freedom.
Canada earned a score of 7.97 out of 10, tying with Australia for the fifth position out of the 144 countries included in the report. This year’s ranking marks a step up for Canada, which was ranked sixth in last year’s assessment.
“Canada’s relatively high level of economic freedom has resulted in stronger economic growth, higher income levels, and less pain from the global recession,” Fred McMahon, the Fraser Institute’s vice-president of international policy research, said in a release.
This is while many other countries imposed heavy regulations and spending in response to the recent debt crises, McMahon said.
Because of the high levels of spending by its government, the U.S. plummeted to 18th place, down 10 spots from 2011 and a sharp drop from the second position it held in 2000.
Scoring the highest for economic freedom was Hong Kong (8.90), followed by Singapore (8.69), New Zealand (8.36), and Switzerland (8.24).
Japan took the 20th spot, while Germany and France took the 31st and 47th spots respectively.
Venezuela came in last, preceded by Myanmar, Zimbabwe, Republic of Congo, and Angola.
To produce its rankings, the think tank considers five different areas: size of government; legal structure and security of property rights; access to sound money (capital markets); freedom to trade internationally; and regulation of credit, labour, and business.
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