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While its boost in the rankings is impressive, the province’s overall rating on the three key indicators — size of government, taxation, and labour market freedom — remained largely unchanged.

“The biggest thing is that the United States’ jurisdictions have been trending down,” Mr. McMahon said, explaining Saskatchewan’s bump in the rankings.

“Everybody else must be moving down,” echoed David McGrane, a University of Saskatchewan political science professor. “It’s not as though a lot has changed in a single year in Saskatchewan.”

The drop in American rankings is because the Obama government has continued a spendthrift approach first adopted by the Bush administration, while Canada’s spending increase has been far less dramatic, Mr. McMahon said.

In the report, he and University of Texas researcher Avilia Bueno also argue the United States has seen a significant spurt in regulatory growth, in part due to stock-market scandals such as the one spurred by the Enron fraud and because of the housing bubble blamed on a failure of policy.

The country has also fought two formal wars, which have caused government spending to balloon and therefore economic freedom to decrease.

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.

Ontario and Quebec, Canada’s two largest provinces, ranked 49th and 58th overall, climbing barely in the rankings from 51st and 59th respectively. “Quebec is the highest tax jurisdiction in all of North America and it has long had a very large government,” Mr. McMahon said, adding that Ontario has been growing its government and increasing taxes, too. “It’s almost like Ontario has Quebec envy — a perverse envy. It’s as if the kid in the class that’s getting a B+ is copying the kid that’s getting a C-.”

Newfoundland and Labrador ranked third among the provinces and 37th overall, while British Columbia ranked fourth in Canada and 43rd overall.

The bottom five spots overall are filled by Canadian provinces — Manitoba in 56th, New Brunswick in 57th, Quebec in 58th, Nova Scotia in 59th, and Prince Edward Island in 60th — but their declines are less dramatic than the gains of other provinces so Canada gained in economic freedom on balance.

Delaware and Texas placed 2nd and 3rd respectively overall.

National Post

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