Since Civ III is just a game, I don't see why Canada shouldn't be a civ to play. Civs like Canada, USA, Australia are young compared to the egyptian but, we enter in a discussion civilization vs nation rather than wether or not Canada should be or not in Civ III.
For the insider Canadians, it is hard to define Canada because there is more than one nation in this country. The English, the French and all the natives are different nations with different languages, different political and historical choices, and different civil laws. It is then hard to reflect it into a civilization game because there still a political problem on that matter into Canada.
Canada should rather look like the new European Union.
The French part of Canada is mostly located in Québec while the rest is English. Natives are spread everywhere and they try to do their best with the remaining lands.
The two biggest issues...
Québec: This nations is out of the constitution since 1982 and it is unacceptable that the English part of the country can set the rules alone. Two solutions ahead. Québec separate or, Québec obey to the rest of the country till the end of its distinct existence. Well, these is a third solution but, the partisans of the two previous ones have a lot of difficulties to accept it. The recognition of Québec nation and a deal signed with these two main nations to form a REAL confederation like the EU and like it was supposed to be in 1867. The day Canada was born.
Natives... a lot of work ahead. They really need the recognition of sub nation and some kind of sovereignty on their own lands. They still fight bit time for every inch since the time the Europeans conquered north america. In 2002, it is unacceptable.
Despite all these nations had several conflicts at each others, they managed pretty well to develop this country and place it amoung one of the best reputation in the world.
See... the history of Canada is very interesting and it deserves more than a good beer reputation. However, several issues must be resolves before the real face of Canada can be revealed to the rest of the world.
Oh, by the way! Iroquois is more legitimated to be in civilization than canadians (english & french). In the early colonization of north american, the Iroquois nation was more developped and avance in many aspects than English, French and Dutch. However, they were way more naïve and not pretty much equiped in arsenal.
PS: Avis aux fédéralistes-unitaristes et aux séparatistes, vous ne m'impressionez guère. Je salut amicalement les confédéralistes et les souverainistes.