The report measured three key indicators: size of government, taxation, and labour market freedom.
While Alberta’s 10% flat tax on personal income and zero sales tax helped it to come out on top, American states no doubt suffered because of increased regulation in reaction to stock market and housing collapses and large outlays for wars in Iraq and Afghanistan.
As the National Post posits, “As the logic goes, economic freedom decreases when governments spend because spending requires revenue, which generally comes from taxes, meaning people are less free to spend and invest their income.”
The only other province to make a significant gain was Saskatchewan, which ranked 32nd overall.
While other Canadian provinces scored much lower, Canada as a whole gained in economic freedom compared to the United States primarily because of the aforementioned causes.
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The Fraser Institute is a Canadian-based conservative think tank.