Again, avoiding Margaret Atwood and Robertson Davies:
Anything by Alice Munro. There's a reason why she's called "Canada's Living Chekov" (hint: it has nothing to do with putting on a red velour tunic and a bad accent).
The Ash Garden by Dennis Bock. At the rate I was giving this book away after 9/11, I was courting bankruptcy.
In The Wings, by Carole Corbeil. This link has the entire Books In Canada review - a rather moving bit of prose itself.
The Last Crossing by Guy Vanderhaeghe. In a just universe, this guy would be bigger than Larry McMurtry, Wallace Stegner, or even Cormac McCarthy.
That Summer In Paris by Morley Callaghan. Okay, so this last one isn't a novel. But it's a brilliantly rendered account of what it was like to be a Canadian (like, regular guy, eh?) rubbing elbows with Gertrude Stein's "Lost Generation" in Paris - the last generation of writers everyone paid attention to.
Enjoy! (Thanks, DV!)