Not that I necessarily agree with regulating content on Netflix; but there is a connection between media and opinions around ideologies, national unity, political awareness, amongst other topics. Being overwhelmed with cheap American content doesn't assist in educating Canadians about Canadian values and awarenesses. This is even more problematic when the viewers are still learning / developing their value systems (e.g. children).
I recall seeing some statistic that showed that an increasing number Canadians were more aware of the American political system then there own... a sad state of affairs that is due to an overwhelming amount of American media presence. It is this type of situation is what the CRTC is attempting to mitigate through regulation.