I don't know about Canada, but I think in the USA, the vaunted universal literacy is largely a myth. As the most recent assessment of adult literacy demonstrates, a majority of adults can't comprehend non-fiction prose pieces that likely seem simple to most of us here.

I think what we're actually seeing is the opposite phenomenon. With the advent of the digital age, people are communicating more and more by the written word. Marginal literacy has been the norm for decades (prior to that, illiteracy was the norm), but now it's in plain view of those of us with advanced reading and writing skills, and in direct contravention of our cultural myth of literacy. It's not as though a person can either read Plato in Greek, or nothing more than her name, and there are no gradations of literacy in between.

Parallel to that is the current economic situation, creating deep pressures on people's time and psyches. People are so consumed by basic survival that they can't even pay attention to the road while they're driving ... or remember that they left their babies in the hot car after they park. Few people have the time or psychic energy to read.