Canada lags behind U.S. in economic freedom: Fraser Institute

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TORONTO – Canadians are less economically free than Americans for the second straight year, according to the Fraser Institute’s annual “Economic Freedom of the World” report released today.

The United States ranks 6th in this year’s report compared to Canada, which ranks 9th.

“Due partly to higher taxes and increased regulation in Ottawa and among provinces, Canadians are less economically free than their American cousins, which means slower economic growth and less investment in Canada,” said Fred McMahon, Dr. Michael A. Walker Research Chair in Economic Freedom at the Fraser Institute.

The report measures the economic freedom—the ability of individuals to make their own economic decisions—by analyzing the policies and institutions of 162 countries and territories. Indicators include regulation, freedom to trade internationally, size of government, property rights, government spending and taxation. The 2020 report is based on data from 2018, the latest year of comparable statistics.

According to this year’s report, Hong Kong again ranks 1st followed by Singapore, New Zealand, Switzerland, Australia, the United States, Mauritius, Georgia, Canada and Ireland.

However, China’s heavy hand threatens Hong Kong’s top ranking.

“While Hong Kong remains the most economically-free jurisdiction in the world, interference from China, including the violent crackdown on pro-democracy protests, severely undermines Hong Kong’s rule of law, which helps ensure equal freedom for all,” said McMahon, adding that there’s a two-year data lag for the annual report, so he expects Hong Kong’s score to decline in future years.

The rankings of other major countries include Japan (20), Germany (21), Italy (51), France (58), Mexico (68), India (105), Russia (89), China (124) and Brazil (105).

People living in countries with high levels of economic freedom enjoy greater prosperity, more political and civil liberties, and longer lives.

For example, countries in the top quartile of economic freedom had an average per-capita GDP of US$44,198 in 2018 compared to US$5,754 for bottom quartile countries. And poverty rates are lower. In the top quartile, 1.7 percent of the population experienced extreme poverty (US$1.90 a day) compared to 31.5 percent in the lowest quartile.

Finally, life expectancy is 80.3 years in the top quartile of countries compared to 65.6 years in the bottom quartile.

“Where people are free to pursue their own opportunities and make their own choices, they lead more prosperous, happier and healthier lives,” McMahon said.

The Fraser Institute produces the annual Economic Freedom of the World report in cooperation with the Economic Freedom Network, a group of independent research and educational institutes in nearly 100 countries and territories. It’s the world’s premier measurement of economic freedom.

The report was prepared by James Gwartney, Florida State University; Robert A. Lawson and Ryan Murphy of Southern Methodist University; and Joshua Hall, West Virginia University.

1 COMMENT

  1. Most Canadians have heard of the Fraser Institute, the British Columbia-based “think tank”. Its reports and “studies” are often covered in the mainstream media as independent and objective.

    But the truth is that the Fraser Institute exists to promote rightwing ideology. It was created and is funded by big corporate interests who sought to change government policy to enrich themselves.

    7 facts about the Fraser Institute:

    1. The Fraser Institute’s research wing was created with money from tobacco companies. The Institute’s “Social Affairs Centre”, set up to promote “free-market” policies on tobacco, guns, and drug use was funded by tobacco giants Rothman’s and Phillip Morris. In 1999, the Fraser Institute wrote letters to British American Tobacco begging for more funding, highlighting reports they had done to discredit science around the harms of second-hand smoke.

    2. The Fraser Institute was a leading opponent of anti-smoking laws, and promoted junk science that denied the harmful effects of second-hand smoke. The Institute, funded by Big Tobacco, produced numerous “studies” that attempted to discredit scientific research on smoking. In particular, the Institute worked to undermine public perception of second-hand smoke. While proven to be harmful, the Institute published numerous reports claiming that second-hand smoke was safe.

    3. The Fraser Institute has taken over one million dollars from the Koch Brothers. The billionaire Koch brothers are known to Canadians as the Republican donors who bankrolled the Tea Party and other far-right American groups. But they also have their tentacles in Canada, and the Fraser Institute is one of their servants, receiving at least one million dollars of Koch money. In 2012 the Vancouver Observer reported that “according to U.S. tax documents, The Fraser Institute received $150,000 from the Charles G. Koch Charitable Foundation in 2008, $175,500 in 2009, and another $150,000 in 2010. The grants were purportedly for “research support” and “educational programs”.

    4. The Fraser Institute takes millions of dollars in dark money from foreign organizations. Beyond the Koch Brothers, the Fraser Institute has a large network of rightwing American funders. Over the years, they have accepted millions of dollars from these sources. While the Institute no longer reveals their large donors, external documents show that they have taken more than $2.6 million from rightwing groups and corporations.

    5. The Fraser Institute has taken hundreds of thousands of dollars from Big Oil. One of the Fraser Institute’s benefactors has been oil giant ExxonMobil. Exxon has given the Fraser Institute at least $120,000. Apparently it’s money well-spent. The Institute is one of the leading Canadian voices of climate change denial. They have published multiple documents denying climate change, including one which put their position clearly: “There is no clear evidence, nor unique attribution, of the global effects of anthropogenic CO2 on climate.”

    6. The Fraser Institute supports huge tax cuts for the 1% and corporations, but opposes a higher minimum wage for workers. One of the Fraser Institute’s biggest issues is the minimum wage. They hate it. But at the same time, they support measures that would greatly increase income for the very rich. For example, the Institute supports reducing or abolishing the corporate tax (taxes corporations pay) and the capital gains tax (taxes that people pay when they get capital income, like when CEOs cash in stock options). Both of these changes would massively benefit the rich. But when it comes to working people, the Fraser Institute opposes policies to increase wages by even a few bucks.

    7. The Fraser Institute attempts to indoctrinate elementary and high school students. Every year the Fraser Institute runs an essay contest which directs primary and secondary school students to submit an essay on a policy topic. Some school boards even promote the contest in classrooms. The Institute strongly suggests that winning submissions conform to rightwing ideology. For example, this year’s contest asked students to explain why the minimum wage was a “misguided” idea and suggested students consult a video called “Minimum wage hikes in Canada: Bad idea” to understand the issue.

    In spite of all this, the mainstream media still treats the Fraser Institute as an objective, independent source.

    And they have maintained their charitable tax status, which means the huge donations the Institute accepts from rightwing billionaires are tax deductible.

    The Fraser Institute is not a charity. It’s not an independent think tank. It’s a rightwing propaganda outfit propped up by billionaires and corporations.

    It’s time the media started treating the Fraser Institute for what it is.

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