Originally Posted by Wikipedia

The sketch was conceived when SCTV moved to the CBC television network. Due to the difference in the amount of time allocated for commercials, each episode to be broadcast on that network was two minutes longer than those syndicated to the united states. The CBC network heads asked the show's producers to add specifically identifiably Canadian content for those two minutes. Rick Moranis and Dave Thomas thought that this was a ridiculous request, since the show had been taped in Canada, with a mostly Canadian cast and crew, for two years.the request inspired them to create a parody that would incorporate every aspect of the humorous stereotype of Canadians.

The segments were videotaped at the end of a day's shooting, with just Thomas and Moranis and a single camera operator. The sketches were for the most part improvised on the set, after which they would select the best ones for use on the program.

"Rick and I used to sit in the studio, by ourselves – almost like happy hour – drink real beers, cook back bacon, literally make hot snack food for ourselves while we improvised and just talked. It was all very low key and stupid, and we thought, 'Well, they get what they deserve. This is their Canadian content. I hope they like it.'"