Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
How Much Economic Freedom Canada Needs To Compete
Economic Research | December 8, 2025
Economic Freedom Provincial Ratings, Fraser Institute 2025
Canada Needs the Right Balance of Flexibility and Stability to Support Stronger Outcomes and Faster Innovation
On December 2, the Fraser Institute published the Economic Freedom of North America 2025 (EFNA report) with fresh data on the conditions that impact income, job creation, and business growth across the North American continent. The report measures how much economic freedom people and companies have to make economic choices and what influences long term outcomes. The findings place every Canadian province in the lower half of the ranking except Alberta, which raises an important question for policymakers and industry. That is, how much economic flexibility does Canada need to stay competitive in a market that moves faster each year?
What EFNA Shows About Economic Outcomes
EFNA ranks 93 jurisdictions across North America. Alberta sits at 30th. British Columbia is tied at 47th. All other Canadian provinces fall in the bottom half of the continental list. Canada’s national score peaked at 7.93 in 2015 and now sits at 7.69. The United States records 7.96. These score gaps look small, but EFNA’s outcome data shows why they matter. The index tracks ten year changes in income, jobs, and population, and these outcomes differ significantly across environments.
See: Market Forces Pressuring Fintech Plans For 2026
EFNA groups jurisdictions into quartiles (statistical value that divides a dataset into 4 equal parts) to show how economic conditions impact long-term outcomes.
| Indicator | Most Free Quartile | Least Free Quartile |
| Average income | $66,367 | $3,510 |
| Income growth | 24% | 3% |
| Job growth | 18.3% | 9.4% |
| Population growth | 8.9% | 0.5% |
These numbers highlight a clear pattern across North America. Regions with more economic flexibility tend to show stronger movement in income, jobs, and population over long periods of time.
Canada’s Structural Reality And How Much Flexibility It Needs
Canada’s lower ranking results highlight the need to understand what balance of stability and flexibility supports better economic performance. Alberta leads the provinces at an EFNA index score of 6.44, followed by Ontario at 5.67. The remaining provinces sit in a narrow middle band, and Quebec ranks last at 3.10. This tight spread shows that Canada offers stability across the country, but it doesn't produce a high velocity region, so firms cannot rely on domestic momentum the way founders can in faster moving regions.
Another pattern is that income and job growth move at a steady pace. EFNA’s top performers show stronger gains over time. In Canada, steady progress helps households plan, but it also slows the pace at which they change financial behaviours.
Read: Breaking Canada’s Productivity Trap For Stronger Growth
Another pattern is EFNA shows the importance of mobility. Meaning, places with more economic flexibility tend to see more movement of people, jobs, and income. This mobility helps drive stronger results over time.
Canada's objective should be to find the level of flexibility that supports stronger economic movement while keeping the trust and protections that underpin Canada’s success. A practical balance for Canada should include regulatory processes that reduce friction, business and tax structures that attract investment, consumer protections that build trust without slowing innovation, labour rules that support adaptation, and clear frameworks that help firms navigate change.
Canada needs to create an environment that supports both stability and speed. The strongest results come from regions that achieve both.
Implications For Fintech And Financial Innovation
1. Movement Impacts Markets, and Movement Is Slower in Canada
Financial services are intrinsically related to the movement of money, people, firms, and confidence. EFNA outcome data confirms that these forces accelerate in more flexible environments. In Canada, they still move but the pace influences how companies grow. This steady environment affects how/when customers may be willing to try new financial tools and services, and how long new market sectors take to build growth and traction.
For fintechs, it means early fundamentals are more important, especially in the current economic climate. Companies need clearer value, earlier product market fit, stronger unit economics, and a model that can carry the business through longer adoption cycles. Growth comes, but it takes more time to build. Firms that rely only on rapid customer movement might face a harder path.
See: Fintech’s Role in Canada’s Productivity Revival
Government can help shorten this path. Acting as a first customer, reducing administrative friction, speeding approvals, and improving procurement can help credible firms break through sooner. Government can't replace real demand, but it can help companies reach it faster.
2. Scale Requires Mobility, Not Just Stability
EFNA highlights the importance of mobility whether that's economic, labour, or population mobility. Income and jobs move more strongly in flexible environments, and that movement supports scale. Canada’s strength is stability. People stay. Businesses stay. Conditions remain predictable. Stability is valuable, but on its own it doesn't support rapid scaling as well.
Fintechs that want to scale inside Canada need strategies that work in steadier environments. This may include building distribution partnerships earlier, designing products that create immediate and visible value, and targeting segments where switching costs are low. Companies need to shorten the time between awareness, trial, and sustainable use.
Policymakers can support scale by reducing barriers that slow switching, such as streamlining licensing, enabling data portability, modernizing onboarding requirements, and creating space for controlled innovation. These steps do not change stability. They add mobility where it is needed most.
3. Canada Needs the Right Balance of Flexibility and Trust
Canada’s provincial scores are pretty close together. Alberta leads the country, but no province reaches the levels seen in EFNA’s top performers. Canada has trust but it needs more flexibility at the edges to create the right conditions for growth.
For fintech companies, this means building trust and flexibility at the same time. Products must meet high expectations on security and reliability while offering customers faster ways to act, decide, and move money. Fintechs that pair strong trust with simple, flexible choices for customers tend to gain momentum in steady environments.
See: Regulating for Growth by Understanding Innovation
Policymakers play a role by making rules clearer, approvals faster, and compliance pathways more predictable.
Reducing friction does not weaken trust. It helps companies deliver it more effectively. The balance Canada needs is not maximum freedom. It is enough flexibility to let economic movement take shape while protecting the values that matter to Canadians.
Closing
The Economic Freedom of North America 2025 report (166 page PDF) is a data-driven look at the kind of environments that tend to generate stronger outcomes. Canada has strong institutions, talent, trust, and resilience. The question is whether the country can create enough flexibility to strengthen Canada's economic competitiveness. The foundation is here, but the next step is structural change.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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