Graham Steele accused the Vancouver-based group on Tuesday of being a political organization that "produces junk."
"It is not a serious institution," he said to reporters after giving an update on the province's finances.
"It is a political organization and it is no accident that their focus is on the Ontario election. They're trying to make themselves relevant to the Ontario election."
In its annual report card on the fiscal performances of the 10 premiers, the institute called Ontario's Dalton McGuinty and Quebec's Jean Charest among the worst managers of provincial finances.
The report rates former B.C. premier Gordon Campbell as the best manager with Danny Williams, former premier of Newfoundland and Labrador, in second place and Nova Scotia's Darrell Dexter third.
Manitoba's Greg Selinger, McGuinty, and P.E.I. Premier Robert Ghiz are ranked in the bottom three spots by the institute.
Steele suggested that's no coincidence.
"It is no accident that the three premiers they rank at the bottom are three non-Conservative premiers who are all up for re-election right now," he said.
"It's crap. I'm sorry, are ministers not supposed to say that?"
Niels Veldhuis, a senior economist and vice-president of policy at the Fraser Institute, said he can't understand Steele's reaction to the report considering how well Nova Scotia fares.
He said Dexter's NDP government has increased spending at a pace that is lower than the rate of economic growth.
"That actually is a model to the other premiers, so congrats for that," said Veldhuis. "And while he is running a deficit, it's quite small. It's one of the smallest in the country.
"Obviously, he does well in the report card and I don't understand why the finance minister would have such a visceral reaction to it without actually understanding what's in the report."
He called Steele's response "inappropriate for a minister."