“The key driver of our success versus the U.S.’s success is really size of government,” said Fred McMahon, the Fraser Institute’s vice-president of international policy research. “That’s where Canada, since 1995 has gone up significantly [in ranking] and where the United States has gone down even more significantly.”

Canada’s economic freedom began to rise under former prime minister Jean Chrétien, who reined in the budget and reduced government spending dramatically — more than Ronald Reagan or Margaret Thatcher, Mr. McMahon said.

Meanwhile, George W. Bush began to spend — U.S. government consumption went from 17.6% of GDP to 19.5% in 2000, transfers of subsidies went from 13.2% to 16.3% and the government enterprises and investments went from 17.6% of GDP to 22.5%.