In its annual "Best Countries for Business" ranking, the magazine said Canada had "skirted the banking meltdown" that crippled the United States and Europe and has a $1.6 trillion economy that grew 3.1 percent last year.
The United States slipped from ninth place in the Top 10 to last place.
Forbes noted Canada is the largest oil supplier to the United States and is also the largest exporter southward. Despite that reliance, the magazine said Canada had maintained an unemployment rate of 7.3 percent during the financial crises that began in 2007, compared with a U.S. jobless rate above 9 percent.
Among the 11 criteria Forbes used in its rankings of some 130 countries were personal and financial freedom, taxes, corruption, technology, stock performance and property rights.
Following Canada, the second most favorable country for doing business the magazine cited was New Zealand, followed by Hong Kong, Ireland, Denmark, Singapore, Sweden, Norway, Britain and the United States.