I don't think opening stores in Canada would be all that straightforward. The company I work for now is opening stores in Canada now and they needed to create a whole new Canadian business entity for it. The reason being that if they used the same one as the US, then Canada could tax all sales taking place in the US as well. (I'm sure it's more complicated than that, but that is how it was explained to me.)

Also, I've heard that Trader Joe's only expands in groups of three stores at a time. It has to do with their distribution centers or something. So they need the demand in order to make opening up a new distribution center worth it.

I doubt Trader Joe's is "refusing" to operate in that part of Canada, it's just that it's lower on their list of places to open new stores.