Thus far, Canada has been content to roll along with the ESRB system in pretty much the same way as the US: It's technically voluntary but your nuts will be in a crusher if you're caught violating it. Canada is represented on the ESRB advisory board as well, in order to reflect Canadian cultural sensibilities which, sometimes, diverge from those of Americans.
That said, the situation is what it is because like so many things here, it's working reasonably well and so nobody wants to mess with it. What we lack, unlike the Americans, is explicit protection of videogames as artistic expression. It hasn't been a problem so far, but if the federal and/or provincial governments decided they wanted to step in and lower the boom, Canadians just don't have a Constitutional fallback position.
(So goes my understanding, anyway. Also, excuse the late response.)