Do banks ever go under in Canada? Yes, it's rare, but they have and they can again.
The Canada Deposit Insurance Corporation (CDIC) is a federal Crown corporation that exists to protect savings in their member financial institutions against their failure. Since it was established by Parliament in 1967, there have been 43 financial institution failures affecting more than two million depositors. These were stressful times, but CDIC was there to protect Canadians. No one lost a single dollar of insured deposits.
It's important to know that not everything is protected. Some deposits, such as mutual funds, stocks and bonds fall outside of CDIC's umbrella. Foreign currency (including U.S. dollar accounts) would also be exposed to risk should a bank fail.
If you bank with a CDIC member institution (full list available at cdic.ca), your eligible deposits including savings accounts, term deposits and GICs with a term to maturity of five years or less, are automatically covered up to $100,000. It is free and automatic, but you should know how it works to benefit fully.
Talk to your financial advisor, or ask about deposit insurance where you bank or invest.
