No way is Canada the worst country for piracy. That particular distinction must surely go to China from whence most pirated disks emerge. Even here in Australia it is not that hard to visit a flea market and see people buying pirated disks under-the-table for a few bucks. The answer for the studios is to reduce the prices for new release DVDs and people will be less inclined to take pot luck buying crappy camera-in-the-cinema jobs.
In Australia the major studios have drastically reduced the prices of older titles to prevent rampant piracy. Movies like "The Sting" can be bought for about ten bucks...who'd want to risk buying a counterfeit copy of it when the real McCoy is so cheap? So that, IMHO, is the answer...drop the prices and kill off piracy.