To check on the availability of a Kindle book in Canada, go to the
Kindle Store. Far-left side at practically the top of the column is a small "Your Country or Region". Set it to Canada, and then go search for a book.
Here's an example of one that keeps getting recommended to me, but which I can't get myself: Elizabeth Peters'
The Crocodile on the Sandbank. As you can see, the right-hand box where the 1-click buy option would normally be just says "This book is not available in Canada".
As for Kindle vs Kobo, well, that particular Peters book is available in the Kobo store, to Canadians.
I think there's actually better selection overall in the Kindle store, just because a lot of authors/publishers have been seeing Amazon/the Kindle as a popular device for ages, so it's their go-to option when releasing ebooks at first. That may change as the iPad gets more popular and the reader wars really kick off.
However, not all of them are releasing outside the US, so almost everything at Kobo will be available in Canada and you can get books there you can't elsewhere.
Another consideration is that the Kobo uses the popular ADE DRM, which means that you're not just limited to shopping at Kobo, but can also buy from the Sony eReader store and any other that supports the Adobe Secured PDF and ePub formats. B&N use their own proprietary DRM, so their books aren't compatible unless stripped, although you can also put regular ADE-DRM books on the Nook.
Sony store also offers a lot of
free books (though not nearly as many), often the same as Amazon does (it's the publisher which determines which freebies to promote) and the Sony store prices the same for Canadian customers as US, no Whispernet surcharge, although some of their books will be US-only.
And you have to buy through their awful Reader store interface in the special software they make you download, instead of via the browser, though that's only a brief inconvenience.
I'll mention that you can read most library ebooks (often PDF and ePub) straight up with the Kobo or Nook. But you can put Mobipocket format library books on the Kindle easily enough with an easy-to-use Python script that generates a valid Mobi PID for your Kindle, and another one that tricks the Kindle into thinking it's got a compatible Kindle-DRMed file in the resulting borrowed download. No actual DRM-breaking involved.
My province pools all its libraries into its ebook lending program, so it's got a pretty good selection, and you might want to have a look at yours.