Western Canada = British Columbia and Alberta
Prairie & Northern Canada = Manitoba, Saskatchewan, Nunavut, North West Territories and the Yukon
Central Canada = Ontario and Quebec
Maritime Canada = Prince Edward Island, New Brunswick, Nova Scotia and Newfoundland/Labrador
I vote for provinces as well. Sure, the NL, PEI, YK forums won't get much action, but for those who are in those areas, it is an easy way to meet others, and discuss City-centric issues (isn't that the whole reason behind this forum?).
I'm not sure there needs to be a Canadian forum period. Instead of having the US and Canada just make it a North American Forum and include the individual provinces mixed in with your States in aphabetical order.
Leave it as one forum until there's more activity. once the member count increases, , make city based subforums. The point of cityforum is (possibly) to connect people by locality so they can swap information, meet up, advertise events and services, etc etc etc.
So at least by province, or BC,Alberta, Saskatchewan/Manitoba, Ontario, Quebec, Maritimes maybe?