It's almost cliche at this point. Every time there is an issue in the US you can almost count down the seconds until someone decides to claim they are moving to Canada. And what's not to like? Socially liberal*, universal health care, curling and funding rates so high that they give you a grant for crossing the boarder, right?
The current situation with NSF funding doesn't appear to be any different in this regard. Low funding rates and the recent application changes have people once again invoking the tired "Why can't we do it like Canada?" Look, I love our neighbors to the North as much as the next person, but there are things you can pull off when you have a population the size of California that just won't work in the US. If you need a primer on the Canadian system, a good one is here, but the summary is as follows: The NSF equivalent, NSERC, maintains 60% success rates (currently); grants are for 5 years; the annual total is usually small by US standards, roughly $20-50K; students are not typically supported off grants; there is no overhead take by the university**.
On the plus side, 5 years provides stability and the high success rate means that labs do not typically burn out due to lack of funding. The flip side of that is the career trajectory of new PIs can be skewed. First time grants are often between $15-25K over a five year stretch. This is your proving time to show you are worth a bump at your first renewal, otherwise you my find yourself locked into <$20K budget for A DECADE. But back to the first 5 years, at $20K/year you're not hiring a postdoc or tech. More likely you'll have two students at a time, who are on a relatively short leash when it comes to reagents. Maybe this is an issue for your science, maybe it's not, but don't forget that all your conference travel, publication costs and in some cases, student summer salary, come out of that $20K. You can only hold a single NSERC grant at a time, so unless you can go to foundations or CIHR (the NIH equivalent), you're locked into that budget for the duration.
If you make proverbial lemonade, you might get a bump in year 6, but there is no guarantee of this and I've had colleagues with similar records get doubled or maintain the same budget for their second grants. Additionally, if you do get money outside NSERC, you're almost guaranteed to get short shrift from NSERC in future applications in favor of those reliant on NSERC, regardless of your record.
The result, however, is that people doing science that costs a bit more end up having to pick away for the first 5 years, rather than come out with guns blazing. Start-up packages are also considerably smaller than the US, and buying equipment for the lab is often tied to applying for CFI equipment grants. These also have a high funding rate, but there is the risk that you'll have a largely empty lab for 6-12 months. All of these factors make it more difficult (though people certainly do it) to really take off as a junior PI.
But let's assume that we can deal with a drawn out career arch if the result is more people funded. Here's the bigger problem: the universities.
I already wrote this in a comment on the post linked above, but entire funding structure of universities would have to be reworked. The issue with the Canadian system is that it CAN’T work in the US without massive changes to how universities operate. US universities use the overhead from individual grants as a major portion of their budget, whereas this is not the case in Canada. If NSF started funding at $30-50K/year, not only would labs who have to support students (+ tuition) off that get little to no work done, but universities would lose a huge amount in revenue (not to mention that the Uni would take 1/3 of that money anyway).
On the surface you can just say that the universities will have to compensate in some way, but it also means that most larger universities will focus their hiring on NIH-fundable PIs, even more than they already do. Basic science in the US would then suffer BOTH from being underfunded and phased out of university hiring priorities. The end result would likely be a situation where smaller universities do basic science and larger ones do NIH stuff, which is not ideal. Let us also not lose sight of the fact that "basic" research is a critical springboard to medical research, often in unexpected ways.
Changes at the funding source would have to be matched with changes at the university level, which are unlikely if NIH is unaffected. I am not at all claiming this is impossible, but merely that we have to take into account the larger structure before we tout another system as being "more fair" or "better".
Much in the same way that people want universal health care but don't want higher taxes, it's important to realize that the implications of different systems have far reaching effects that may not be obvious on the surface. If all you see if "60% success rate!!!!!" you are missing the larger context.
There's no free lunch out there, folks. Decide what the priorities are and then figure out how we pay for them.
* On average. Alberta hasn't received the memo yet.
** Although this is changing slightly and Canadian universities are getting creative about ways to "charge" for certain facilities, resulting in some grant money claw-back.