Due to the competition levels in the market, you will need to differentiate yourselves with something relatively unique - your killer selling point.
From a personal perspective, you are entering a very saturated market with a lot of good and an even greater number of bad hosts. I would say that in your initial period while building up the business, that you want to keep your capex and opex as low as possible (duh!) while you build your customer base. You may be best off starting with a dedicated server or two for your initial deployments. That way you don't have to worry about the hardware breaking at 0300 and having to rush down to the DC to fix it, after you've had to keep spares stocked on site etc..etc..
If you are after a local Canadian provider, I believe Peer1 are Toronto based (I could be mistaken).
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