The US is perfectly willing to enforce its own rulings on foreign companies operating solely abroad, at the point at which those companies' goods/services enter the US.

So why wouldn't we just assume that every country is going to do the same; and so pre-emptively self-regulate if we want to do business in foreign markets with differing laws?

Canada has every right to say that it will block Google from Canadians accessing it unless/until they censor those pages, not just for Canadians, but for everybody. Given that, and given that Google knows that they could do that, what options are Google left with (assuming they care about remaining available to Canadians)?

The current laws do not fix the problem - but it is hard to see which ones will

The U.S. does the same, and expects the same. In the scenario of this case, Canada is demanding that Google remove infringement of a Canadian citizen's copyright from Google's server. Similarly, the U.S. is well-known for aggressively pursuing entities in other country's for violating U.S. copyright protections.

Google is not the good guy here, they're trying to protect their ability to distribute pirated content. And they have no legal basis for their refusal to comply.

Note that Canada has not stated that data on a US server must be censored "when a Canadian connects to it". Canada has stated that Google must remove the data from all of their servers, regardless of where it is accessed. Aka, it is not okay to pirate a Canadian citizen's content even when it's on a US server and being accessed by a US citizen.