Forbes has ranked Canada as the best country for business, moving up from fourth spot last year.

The influential U.S. business magazine says the improvement is in part because of the introduction of the harmonized sales tax last year in Ontario and B.C.

Supporters of the HST say the tax helps business cut their input costs and become more efficient with less paper burden.

The publication also cites lower corporate and employee tax rates for helping business.

Corporate tax rates were a key campaign issue in the last federal election, while B.C. recently held a referendum in which people voted to repeal the HST.

Forbes praises the Canadian banks for skirting the financial crisis that began in 2007 and emerging as among the strongest the in the world.

Canada beat out New Zealand and Hong Kong, which placed second and third respectively. The U.S. ranked 10th, down from ninth a year ago.

Forbes ranked the countries based on 11 different factors including property rights, innovation, taxes, technology, corruption, freedom, red tape, investor protection and stock market performance.