"How would that affect Canada if Google search were not available there?"
The biggest thing is screwing up the service integration of Android phones -- there's the opportunity that Blackberry and Microsoft have been salivating over. The next biggest is @gmail.com email blinking out, which would be chaos (maybe you want to exclude gmail from the services that are withdrawn?) and people would probably scatter first to ISP-allocated email (because they already have that, like it or not) and then maybe later to various competitors. Search from a PC is the next biggest, but that one gets solved when everybody's techie nephew or niece goes around switching homepages and search boxes to bing.com and uninstalling Chrome, or failing that when all the major browser other than Google push out updates that redirect existing google settings to their favourite default (IE - Bing; Firefox - locale-specific, usually Bing; Opera - dunno; Safari - between Bing and Yahoo).
As a wholesale, things would have to get far worse than its ever likely to be before that made any sense for Google.
Pulling out of Canada would hurt Google more than it would hurt Canada. Essentially, if Google pulled literally all their services from being accessed in Canada, even for a relatively short period like a month, they could *never* come back, because such an action is indistinguishable from extreme technical unreliability. I strongly suspect such an action would lead to people in other countries fleeing their services (particularly businesses). So it's not going to happen.
It would also be a giant middle finger to any third party trying to sell Android devices in Canada, which is of course the companies as are trying to sell in the US and so forth.
People used to talk about this with Microsoft and the EU back when Windows was more dominant (Microsoft didn't say anything like that, cynical slashdotters did), and it obviously didn't happen because it would have been ridiculous even in that case. But in that case, it wouldn't have been so bad because they weren't talking about retroactively removing Windows from EU computers. Here we're talking services, so if they go, they are gone in a flash.
So this goes back to maybe removing all video services like YouTube, and maybe some services that nobody uses, but leaving all the critical non-video services. I think Google / Netflix would still take it in the chin not just in Canada but also abroad as others see that Google was willing to squeeze customers, but it's more plausible. I can imagine a world in which Google or Netflix feels it is untenable to service Canada because of the legal ramifications, although I don't think we're there right now or in the near future.
Google and Netflix are still probably the losers in that exchange. The result will be somebody else coming in and serving that niche in Canada, a force which may eventually be able to expand outward into Google and Netflix territory -- a force they would want to nip in the bud with their superior market presence. It's not like the secret of streaming video technology is unknown to Canadian engineers, and its not like Netflix or YouTube are so critical to Canadian day to day life that to cut off Netflix access would cause an overnight revolution.