British Columbians are experiencing more economic freedom than residents of most other provinces, but individuals and families in B.C. have less ability to make their own economic decisions than residents of nearly all U.S. states.
According to the report, the Economic Freedom of North America 2010, released Tuesday morning by the Fraser Institute, people living in jurisdictions with high levels of economic freedom enjoy higher standards of living, greater individual freedoms and longer life spans.
A common theme among provinces with high levels of economic freedom is a commitment to low taxes, small government and flexible labour markets, according to the report. Such conditions, it said, foster job creation and greater opportunities for economic growth.
Alberta has the highest level of economic freedom in Canada and the third highest among all jurisdictions in North America behind Delaware and Texas, according to the report. All other provinces lagged far behind Alberta in their levels of economic freedom.
Newfoundland and Labrador was the second highest-ranked Canadian province, but placed 47th in North America.
British Columbia (50th), Ontario (tied for 51st), and Saskatchewan (53rd) follow Newfoundland and Labrador.
New Brunswick (56th), Manitoba (57th), Nova Scotia (58th), Quebec (59th) and Prince Edward Island (60th) have the lowest levels of economic freedom in North America.
The report states the 12 North American jurisdictions with the highest levels of economic freedom had an average per-capita GDP of $51,654 in 2007. The average per-capita GDP of the 12 lowest-ranked jurisdictions in 2007 was $41,652.
The report said Ontario’s declining economic freedom has hobbled the province’s growth, which has been among the slowest in Canada in recent years.
An increase in the level of economic freedom in B.C. – which was one of three provinces to see an increase – helped fuel a 17% increase in economic growth in the province.
Quebec and Ontario experienced no increase in the level of economic freedom.
The report said it is likely Ontario’s economy would lag if economic freedom in that province continues to show weak growth.
Canada’s fiscal federalism and the structure of the equalization system makes it more difficult for Canadian provinces to harness the benefits of economic freedom compared with American states.
Said the report: “Strong incentives exist for the political and business elites in the so-called ‘have-not’ provinces to limit economic freedom and growth in order to preserve the federal allowances they're accustomed to.”