TORONTO - Forbes ranked Canada as the best country for business on Tuesday, moving up from fourth spot last year, helped by a lower overall tax burden.

"While the U.S. is paralysed by fears of a double-dip recession and Europe struggles with sovereign debt issues, Canada’s economy has held up better than most," the influential U.S. business magazine wrote.

Forbes noted that Canada ranked ninth among the 134 countries reviewed for tax burden compared with 23rd in the category for 2010.

The magazine said the improvement was in part because of the introduction of the harmonized sales tax last year in Ontario and British Columbia. Forbes also cited 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.

In Ontario, the governing Liberals have faced criticism over the HST, with both the opposition Conservatives and New Democrats in Thursday's provincial election promising changes to the tax, saying they will remove it from certain bills.

The HST combines the provincial sales tax and federal goods and services tax.

Supporters have said the HST is a value-added tax that spurs investment and create jobs by removing levies on business inputs. HST opponents have said the HST shifts taxes to consumers from business.

Forbes praised Canadian banks for skirting the financial crisis that began in 2007.

"Canadian banks emerged from the tumult among the strongest in the world thanks to their conservative lending practices," Forbes said.

Canada was the only country to rank in the top 20 in 10 of the 11 categories considered by Forbes.

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

Denmark, last year's winner, dropped from the top spot to fifth as its stock market fell 14 per cent.

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.

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• The 10 Best Countries To Do Business

  See where Canada falls in the <a href="http://www.forbes.com/sites/kurtbadenhausen/2011/10/03/the-best-countries-for-business/" target="_hplink">Forbes rankings of the best countries in the world in which to do business</a>.

• 10. The United States

  The world's largest economy just snuck into the top 10 on Forbes' list of best countries for business. The magazine cited the nation's heavy tax burden as one of the reasons why it did not place higher. (Photo by Spencer Platt/Getty Images)

• 9. The United Kingdom

  A historic leader in global trade and finance, the United Kingdom placed a strong 9th place. (Photo by Tom Shaw/Getty Images)

• 8. Norway

  Oil boosts the economy of this Scandinavian powerhouse. (Photo by Scott Barbour/Getty Images)

• 7. Sweden

  Iconic global brands such as Ikea, Ericsson and H & M call Sweden home. (Olivier Morin/AFP/Getty Images)

• 6. Singapore

  A key global shipping hub, Singapore, is one of the best places in Asia to do business. (Roslan Rahman/AFP/Getty Images)

• 5. Denmark

  The third Scandinavian country on the list, Denmark fell from the top spot on Forbes' ranking. (Getty Images)

• 4. Ireland

  Despite being hit hard by the recent economic crisis, Ireland placed a respectable fourth on the list. (Peter Macdiarmid/Getty Images)

• 3. Hong Kong

  Home to the iconic Hang Seng index, Hong Kong's exposure to China and reliable institutions make it one of the world's best places for business. (Ed Jones/AFP/Getty Images)

• 2. New Zealand

  Punching above its weight is the southern nation of New Zealand. The country only has fewer than 4.5 million people but its the runner-up on Forbes' list. (Photo by Sandra Mu/Getty Images)

• 1. Canada

  The CN Tower looms over the Toronto Blue Jays and Detroit Tigers as the Rogers Centre's roof is open for the first time in the 2011 MLB baseball season in Toronto Saturday, May 7, 2011. (AP Photo/The Canadian Press, Darren Calabrese)