I don't know how things are in Montreal but here in the GTA, we let go of a couple of people in Q4 of last year and they were rehired within a couple of months. They were embedded developers, working with C++ and Java/Android. One went into a full stack web development role. On one hand it could be a matter of skill set. .NET isn't exactly the most popular platform at the moment. On the other, "tech" really did feel quite bubbly over the last decade. Whenever a huge chunk of students decide to go to this one field (used to be business administration/management) you know job prospects will get tough eventually. Employers become more picky towards exact skill set, degree, experience, etc.
You mention small companies, have you tried large ones? The Big Five for example take a lot of developers.
Perhaps your resume is a bit thin. If for example it's got a degree and one section of .NET in it.
In any case, the standard fields of web/full-stack, Android, iOS, DevOps should have the most openings.
Speaking of your title question, whether software development is no longer a viable career in Canada? Almost certainly not. There's little reason for that to be the case. We're still significantly cheaper for US corpos so if anything, I'd expect those to lose US workers and hire Canadians. I expect the Canadian tech labor market to be affected by global events. Overall expansion/contraction. Displacement from AI in the future. Personally I hope the field can get organized in order to make such labor shocks less sharp and less frequent and have some say in how AI is deployed in the industry.