Prosperity index ranks Canada 5th in world

Canada ranks No. 5 on an international prosperity index produced by the Legatum Institute of London that combines measures of economic progress, health, opportunity and personal freedom.

Canada is behind countries such as Norway, which tops the list for a second year, Switzerland, New Zealand and Denmark, but ahead of Australia, the U.S., U.K. and Germany. The prosperity index ranks 142 countries, with Chad and Central African Republic at the bottom of the list.

Canada has slipped one position from the ranking of fourth it achieved last year, after receiving lower marks in social capital, a measure of civic engagement including how many people have volunteered, donated to charity or helped a stranger.

New Zealand moved ahead of Canada, up two places to No. 3 on the index, after showing high levels of social capital and an improved economy.

Noted Canadian tolerance

Canada climbed from its lower rankings of sixth and seventh in 2011 and 2010 after coming through the financial crisis relatively unscathed, the institute’s report said.

The index noted Canada’s tolerance, with 92 per cent of people saying they have the freedom to choose the course of their own lives, socially and economically.

Canada also was among the freest countries economically, along with the U.S., U.K., Switzerland, New Zealand and Australia.

The U.S. ranked No. 10 on the index, with a big improvement in 2014 on its economic prosperity as unemployment fell and business optimism improved. But it fell five places on the personal freedom index after revelations of internet and phone tracking by the government and a chill among immigrants trying to get a start in the U.S.

The U.S. is back in the top 10, but remains low in safety and security, says Stephen Clarke of the Legatum Institute.

"This year, the [U.S.] economy’s done well, so it’s risen in the economic rankings and that’s partly why it’s back in the top 10," he said in an interview with CBC's The Exchange with Amanda Lang.

"But there are two concerns in America and one of those is personal freedom, so only 10 per cent of Americans feel they have the freedom to choose personally in life. That figure was around 88 per cent five years ago," he added. 

The U.K. was at No. 13, but the report noted an unusually strong climate for small business in the country.

China has jumped to sixth on the economic prosperity index, but still ranks at No. 54 overall because of its poor showing in personal freedoms.

Clarke said material circumstances are important, so countries with strong economies seem to fare well, but they aren’t the whole picture. Sometimes, it's public perceptions that change a ranking.

"During the financial crisis, we did see big declines in the economy which have a knock-on effect in the sub-indices, so when the Mediterranean countries economically struggled and in many cases are still struggling, things like social capital and feelings about personal freedom and other aspects have also declined," he said.

Among the biggest losers on the index was Russia, which at No. 68 is the lowest-ranking country in Europe, after invading Ukraine. Syria fell in the rankings because of its civil war and Venezuela dropped because of rampant inflation.

The prosperity index includes 89 variables for each country, based on the world Gallup poll, standard measures of GDP per capita and OECD and World Bank measures of well-being. 

                                                                                                                                                                           

Prosperity Index Ranking
1. Norway	11. Iceland
2. Switzerland	12. Ireland
3. New Zealand	13. United Kingdom
4. Denmark	14. Germany
5. Canada	15. Austria
6. Sweden	16. Luxembourg
7. Australia	17. Belgium
8. Finland	18. Singapore
9. Netherlands	19. Japan
10. United States	20. Hong Kong