Hey justification,
I'm in Canada, am a fan of Canadian Couch Potato, and had this question too. I asked CCP about it (somewhere on their site!) and also printed out a bunch of years' return rates as posted on it. I found that in enough years, Canada's stocks rocked it, and made this allocation absolutely the way to go. I've since comfortably run with it. I think what CCP said, essentially, and what I found when reviewing years, is that Canada has sucked a bit recently, but in the "longer short term" (20 years) it's proven the right way to go. Not just tax-wise, but rate of return wise.