I rather doubt that it's Canada's privacy legislation (and overall attitude towards privacy) that prevents Overdrive from working with Amazon here as they do in the States.
The far simpler explanation is that Amazon simply doesn't care a lot about the Canadian market. This has been shown a number of times, most clearly with the launch of the Kindle Voyage. It's understandable, really... Canada's population is roughly 11% that of the U.S.
Still, the library support is one of the main reasons I've always preferred Kobo. Even with an older model that needs to sideload loans through Adobe Digital Editions library loans have been fantastic for me.
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