A situation in which both parties are too nice to let themselves win at the other's expense. The opposite of a Mexican standoff.
For example, if two Canadians arrive simultaneously at a narrow doorway, each is likely to stand aside and invite the other to cross first, and so on, until they both give up, set up camp for the winter, and offer each other a beer.
When we were watching the game last night, my buddy and I got ourselves into a real Canadian standoff over the last slice of bacon pizza. It just ended up going cold.