most Canadian mortgages weren't much like America's "lie-to-us" mortgages.
"So not only does Canada offer no-money-down deals, but also liar loans, interest-only mortgages, payment-skipping and 125% financing."
The fact that these are all ARMs is particularly scary - if interest rates go up, foreclosures will skyrocket. The full-recourse aspect of Canadian mortgage law might help the banks to some degree, but will absolutely put the screws to people who are stuck with a mortgage they cannot afford.
Interest rates don't even have to go up. ARMs are generally written so that rates skyrocket at the end of term, even when the reference interest rate is zero, and pretty much all of them are referenced to LIEBOR, which if it returns to the unmanipulated rate will be much higher, because it includes bank default risk. You didn't even remark on the bubble payment loans. The upshot is, that even for those borrowers who can afford to pay their current loans, even if rates don't rise, a large fraction of them will be forced to default because their loans terms end and they are no longer considered creditworthy due to maximum term reduction, valuation reduction eating into net capital, and eventually, down payment increases.
Unlike Spain in particular, Canada at least has relatively liberal personal bankruptcy laws.
While I agree with you that Canada in a real estate bubble, I don't think it is in more of a bubble than a lot of other countries, notably the UK, Australia, and, especially, China. Even in countries which have had their real estate bubbles pop, there is a lot of housing book pricing manipulation, especially in the US and Spain.