How exactly does it do that?  Here is the Google explanation.

How do we guess your location? In most cases, we match your IP address to a broad geographical location. You can also specify your likely location using the "Change location" link on the top right corner, above the map. We try to make our guesses as good as they can be so that whether youre shopping for -groceries-, -sporting goods- or -flowers-, or looking for your -bank-, your -gym-, or the -post office-, you can just say what you want, and well try to find it right where you are. You can also search for specific stores or street addresses near you, like -cornelia st cafe- in New York, for example.

That seems to work very well if you do any of those searches using google.com.  In addition the Adwords ads that appear on the search page are correct for my location.  Here for example is the search for restaurants that appears at the #4 position using google.com from my location here in Langley, British Columbia.

Where it does not work correctly is if the search is done within seconds from the same computer using google.ca.  The Adwords ads that appear on the search page are still correct for the Langley location. However the general search results show restaurants all across Canada and here is what appears at the #4 position as the block of local restaurants.

The correct IP is easily identified by services like ipaddresslocation.org as Langley, BC. The Adwords ads are also correctly showing local restaurants around Langley, BC. 

You get exactly the same results if you try searches for any of the other shops or services  mentioned in the Google quote above.  In all cases, it is only the main search results and the block of 10 local results that is not involving the IP location.  It is probably using an outdated Google cookie planted at least 18 months ago when I did indeed live in Lasalle, QC.

Presumably at some time the Google search via google.ca will come in line with what should be done as demonstrated by the google.com results.  Ill keep you posted when Canadian local search results for restaurants is working as it should.

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