I've read that it's only a specific time of apartment, one that's not conducive to raising families.
Just like the US, 3+ bedroom apartments are very uncommon in Canada. So their prices aren't going to have much impact on the average.
But there are lots of people with one or two kids in a 2br.
Why?
Not OP but in a nutshell, everybody who could bought an condo downtown (Toronto + Vancouver especially but this is broadly true of the country) with a home equity loan from their main property as an investment, and the loan math only works if all properties are increasing in value and the interest rate stays very close to zero. Neither are true and unless something happens Canada could have our very own 2008 financial crisis. No biggie.