More accurately, the 'problem' is that it seems there is no overarching wish to have a Canadian internet consumer software sector. People are just fine going to do that in California, and there haven't been waves coming back. Nothing wrong with that, maybe Canadians as a whole are content doing other types of technology work. You don't hear a lot about mechanical engineers going to work in the U.S.
It would be interesting to see how many students from Waterloo and UofT alone, leave Canada to go work in the tech industry in the US.
I bring it up because it appears to be quite a lot from my experience as a student at Waterloo. The prevailing thought is that you haven't "made it" unless you go down south when you look for tech jobs.
Most of the people in my year have gone down when they can for co-op.