Debbi, it depends on the agency. Check their website to see whether they have a foreign rights department/person and check Publisher's Marketplace to see whether they have sales outside their country.
I think that most American publishers will publish books with settings in Canada (or elsewhere). But
many Canadian publishers will only publish books written by Canadians and set at least partly in Canada. This is because the Canadian government subsidizes many, if not most, Canadian publishers. The government wants to see Canada and Canadian authors represented in our literature.
Also, when we were sending my first novel out to publishers, I had one manuscript with Canadian spelling and one with American spelling.
-- Barb, a Canadian who has a Canadian agent