It is an indisputable fact that Canada is one of the world leaders in Internet technology and telecommunications. Since 1999, with highly reliable web server's set up in Toronto and Vancouver, Canada has become a formidable, low cost web-hosting provider.
Canadians like to do businesses with companies located within their own country. Hence when they search for companies on search engines, they include the option "search Canadian sites only." This locates only those sites whose servers have a Canadian IP address. Needless to say, these companies have a better chance of drawing Canadian customers. For this reason, some American companies are taking up web hosting services on Canadian servers in order to have their sites show up in search results.
Major cities like Toronto and Vancouver are very close to the American border. Americans can easily locate their web hosting in these cities. This is also added value in terms of money, as the Canadian dollar is cheaper than the American dollar. One more practical point is that Canada has very few energy cuts, unlike some of America's major cities. This means Canadian servers are up and running almost all the time, generating more business. Canada does not believe in outsourcing services. Most of its technology is indigenous, with a physical hands-on presence all the time. If a server breaks down, maintenance and repair is reliable and prompt.
Several small businesses in America are opting for Canadian low cost web hosting. Web hosting in Canada can be free, since it generates revenues from the advertisements it gets. Canadian websites ensure better traffic, since both Americans and Canadians access the websites via the search engines.
To the lay user, it actually does not matter much where the web server is located; but it makes a great difference to the company trying to generate business through its website.