Canada cracks top 5 for global economic freedom

Jean Chretien will never be placed in the pantheon with Ronald Reagan and Margaret Thatcher when it comes to champions of the free market, but it was the Liberal leader who set Canada on the economic path it's now on, according to the Fraser Institute.

Unlike those demigods of the right-wing, Chretien proved far more adept at shrinking the size of government -- one of five key areas that helped propel Canada to a top-five finish in the Vancouver-based think-tank's Economic Freedom of the World: 2012 Annual Report.

Tied with Australia, Canada ranked behind Hong Kong, Singapore, New Zealand and Switzerland among the 144 countries examined by the report's authors.

Though more surprising than the reasons for Canada's climb up the list, is the plummeting position of countries seemingly most wedded to trimming the proverbial fat. The United States -- home of the brave, land of the free — ranks no better than 18^th; 10 spots lower than last year and well behind Ireland and Denmark. The United Kingdom also dropped, falling to the 12^th position from 7^th a year ago.

The authors of the report looked at 42 criteria in five broad areas, ranging from trade policies to the strength of a country's legal system. The data, which dates back to 2010, was drawn largely from studies conducted by the World Bank.

The report argues that there is strong correlation between economic freedom and poverty levels, life expectancy, civil liberties and gross domestic product (GDP), with each improving as the government's role in the market shrinks.

It's this last factor which is seen as the biggest difference between Canada and the U.S. in recent years. Whereas Chretien began a process of deficit-slashing, which Prime Minister Stephen Harper has continued, the U.S. has been stymied by multi-billion dollar bailouts, stimulus programs and bloated defense spending, effectively entrenching the government into ever-more sectors of the economy. The spread has been profound, resulting in the U.S. steadily slipping from its 2^nd overall spot in 2000.

Ironically, the most rapidly emerging economies -- Brazil, Russia, India, China and South Africa -- all ranked well down in the freedom index with only Russia cracking the top 100. The five lowest positions were claimed by a collection of the corrupt and the destitute: Myanmar, Zimbabwe, the Republic of Congo, Angola, and dead last, Hugo Chavez's Venezuela.