Why is Canada's population so much smaller than that of the USA?

It's very cold up here. That's probably the root cause. As listed here, the majority of Canada's population lives close to the US border, and there are a number of reasons for this. One of them is that for individuals, it's warmer farther south, but there are many other reasons as well. For example, the transcanada highway, the primary route for shipping goods across the country, runs close to the US border, and so communities would grow more quickly in proximity to it. The warmer climate of America's south allows for higher population densities and growth. The farthest south part of most of central and western Canada is farther north than all states but Alaska, so our warmest areas are colder than most of America's coldest. Any trade, business or travel between this part of Canada and warmer climates with higher population densities, food production and manufacturing would be international or long distance- For example in Manitoba a business can either ship goods to or from southern Ontario (a distance of 2000 km through Canada) or opt to trade internationally with America. Within America however, trade and business can be conducted more easily. It comes down to how many people / how much business or industry an area can support and how far you are from a denser population center.