CANADA
WORLD RANK:
16
REGIONAL RANK:
C
1
anada’s economic freedom score is 73.7, making its economy the 16th
freest in the 2023 Index. Its score is 2.9 points lower than last year.
Canada is ranked 1st among 32 countries in the Americas region, and its overall
score is above the regional and world averages.
ECONOMIC FREEDOM STATUS:
MOSTLY FREE
The foundations of economic freedom are strong, and the economy has
emerged from the global economic slowdown relatively unscathed. An
effective court system sustains the rule of law, ensuring protection of property
rights and application of the commercial code. Canada performs relatively well
in other pillars of economic freedom and maintains its resilience.
ECONOMIC FREEDOM SCORE
73.7
0
50

REGIONAL AVERAGE
(AMERICAS)
58.6
60
70
59.3
80
100
WORLD
AVERAGE
HISTORICAL INDEX SCORE CHANGE (SINCE 1995): +4.3
QUICK FACTS
RECENT FREEDOM TREND
90
80
77.7
77.7
78.2
77.9
76.6
73.7
70
POPULATION:
38.2 million
UNEMPLOYMENT:
7.5%
GDP (PPP):
$2.0 trillion
4.6% growth in 2021
5-year compound
annual growth 1.4%
$52,985 per capita
INFLATION (CPI):
3.4%
FDI INFLOW:
$59.7 billion
PUBLIC DEBT:
112.9% of GDP
60
2021 data unless otherwise noted. Data compiled as of September 2022
2018
2019
2020
2021
2022
2023
BACKGROUND: Canada is the world’s second-largest country by land area and has a resilient economy.
Prime Minister Justin Trudeau’s Liberal Party has entered an agreement with the left-leaning New Democratic Party (NDP), reducing the chances for political swings before the next election, which is due in 2025.
Canada’s market-oriented economic system closely resembles that of the United States. Leading sectors
include automotive and other manufactures, forest products, minerals, and petroleum. Because approximately
three-quarters of Canada’s exports are to the United States, the U.S.–Mexico–Canada Agreement (USMCA)
that entered into force in 2020 is vital to Canada’s flourishing economy.
88
2023 Index of Economic Freedom
12 ECONOMIC FREEDOMS | CANADA
RULE OF LAW
GOVERNMENT SIZE
100
100
80
80
70
70
60
60
50
50
0
88.5
95.1
83.1
Property
Rights
Judicial
Effectiveness
Government
Integrity
0
75.0
35.0
32.2
Tax
Burden
Government
Spending
Fiscal
Health
The top individual and corporate tax rates are,
respectively, 33 percent and 15 percent. The tax
burden equals 34.4 percent of GDP. Three-year
government spending and budget balance
averages are, respectively, 46.6 percent and –5.5
percent of GDP. Public debt equals 112.9 percent
of GDP.
REGULATORY EFFICIENCY
OPEN MARKETS

The overall rule of law is well respected in Canada.
The country’s property rights score is above the
world average; its judicial effectiveness score is
above the world average; and its government
integrity score is above the world average.
100
100
80
80
70
70
60
60
50
50
0
87.9
69.0
74.8
Business
Freedom
Labor
Freedom
Monetary
Freedom
The regulatory framework is highly conducive
to business formation and operation, and no
minimum capital is required to start a company.
The average cost of necessary licenses is not
burdensome. Flexible labor regulations enhance
employment growth. The most recent available
inflation rate is 3.4 percent.
0
83.4
80.0
80.0
Trade
Freedom
Investment
Freedom
Financial
Freedom
The trade-weighted average tariff rate is 3.3 percent, and more than 400 nontariff measures are
in force. The government caps foreign investment
in some sectors. The banking sector, dominated
by six major banks, remains sound and offers a
wide range of financial services.
The Heritage Foundation | heritage.org/Index
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