I can't speak for YC, but legal overhead is an operational pain.

It's safe to assume YC will continue to fund Canadian founders, but they'll now require them to incorporate in Delaware, Singapore, or the Cayman Islands - none of which is significantly difficult for a founder. You could literally make a US Corp via Firstbase in a couple of minutes [0]

[0] - https://www.firstbase.io/partnership/y-combinator