Yeah I've heard that and usually what they say is something like:
Some foreign hacker could compromise my account without me knowing it, send mischievous emails using my account without me knowing. The US government will pick up on these in flight, ruin my life, embarrass me, and haul my butt off to Gitmo!
However like most things there's a huge difference between perception and reality. As I mentioned the perception of the PA is usually far different than reality. But also the perception of how secure Gmail is.
Implement Google Authenticator (with two-step authentication and one-use passwords) and there's zero-point-zero chance of your account being compromised by someone. Two-Step authentication with Google Authenticator is the number one way to protect yourself. No other free service offers anything close.
Add to that the Google Account activity tracking, Google Device Policy Management and remote wipes and you're rock solid. Oh yeah and the mandatory SSL option.
All that's from a technical front. Then compare Google's non-technical actions such as disclosure in China to the actions of Yahoo. Or their reaction to the Bush administration's URL collecting vs. MS, Yahoo, or Facebook's reaction.
Have Google accounts been hacked: sure. But the people who were hacked didn't follow any of those recommendations and had weak passwords & password recovery options. Google is giving you multiple levels of security - you just have to choose to implement them. All while the other guys hardly give you anything (except maybe the SSL).
And if you think that your Canadian ISP mail means that it's all hosted in Canada, think again. Most will have local servers/data centers, but many also use (maybe just in a backup/DR capacity) AWS or S3. And where is Amazon: two data centers on the east coast, one on the west coast, all in the US of course. So there's no guarantee that your Canadian ISP's email is only hosted in Canada.
Summary: if you want to minimize your chance of your email being subjected to and you victimized by the PA, move all of your email to Gmail hosted in the US. Unless you do actually have something to hide
And as I said earlier, do it through your own domain so you can move it if you need to in the future without ever having to change your email address.