I don't know about Canada, but the US has very lenient bankruptcy laws and the importance of that to innovation (as you noted) cannot be understated.
BK law in the US one case where, because things work well, people take it for granted and assume the laws work well everywhere. (They don't.)
Europeans probably think the same about healthcare. (For those not in the know, U.S. healthcare is awful and insurance companies kill thousands per year.)
I'd say that as of 2005's Bankruptcy Abuse Prevention and Consumer Protection Act our laws aren't so lenient anymore, specifically aimed at pushing most people from discharge of debts (ch7 bankruptcy) to being forced to repay a negotiated amount (ch13 bankruptcy). Theoretically it aims at snaring people who were bankrupting out of their credit card debt, but its definition of "consumer debt" is broad enough that if you took on any personal debt during the birthing of your business, odds are pretty good you can't bankrupt out of it.
It's not too bad, of course, when coupled with limited liability from the start of the business venture. In that case, the bankruptcy reform doesn't really touch you - it's only there to catch private consumers.
BK law in the US one case where, because things work well, people take it for granted and assume the laws work well everywhere. (They don't.)
Europeans probably think the same about healthcare. (For those not in the know, U.S. healthcare is awful and insurance companies kill thousands per year.)