Especially in light of recent American government policies, the economic performance of our northern neighbors has been impressive. But as Washington Times columnist Michael Taube explains in the latest Barron’s, a lingering statist mentality has helped slow the movement toward reform in Canada.

You may think that Prime Minister Stephen Harper of the Conservative Party, who has led Canada since 2006, has a reputation of being pro-free market, pro-international trade, and pro-business. Having known Harper for many years, and having worked for his government as a speechwriter, I can confirm all of these particular credentials.

But there is a problem: Even with a fiscally sound leader and government, Canada’s decades-old statist mentality remains intact. Harper has preferred to implement incremental changes rather than sweeping economic reforms.

Incrementalism has been a successful political strategy. The Tories have won three straight federal election victories. The late Finance Minister Jim Flaherty’s 2014 federal budget reduced the country’s once-lofty deficit to a mere 2.9 billion Canadian dollars (US$2.63 billion) — and it will be wiped out next year. Newly signed trade deals with the European Union and South Korea promise more jobs and opportunities.

Unfortunately, the Tories’ incremental strategy also has had a decidedly negative impact on Canada’s overall economic performance. Consider the World Bank’s Ease of Doing Business index, for instance. In 2006 and 2007, Canada ranked fourth on this list. Since that time, the country slipped to 13th in 2012 and 17th in 2013. It’s estimated that Canada will fall to 19th position for this year. That’s a stunning drop when you consider how successful this nation’s economy has been as compared with other G-20 countries.

Although Canada is a free country in many respects, it seems to forget this designation when it comes to a competitive free-market system. Canadian Conservatives are still taking surprisingly small baby steps to the next level of energizing the free market. …

… Stephen Harper and the Tories have provided plenty of lip service to the glory of the free market. But if Canada truly wants to become competitive, the government should relax foreign-ownership rules, increase trade liberalization, and open up the marketplace to all comers. That’s the right solution for Canada.