USGA or R&A rules in Canada

I've read conflicting reports. Which rules govern golf in Canada Royal and Ancient or USGA?

The Rules are exactly the same. Jointly copyrighted by both organisations.

see the link

http://www.rcga.org/english/Rules/rules.asp

The RCGA administer the Rules in Canada under licence from the R&A.

The first page of my RCGA Rules of Golf reads:

THE RULES OF GOLF as approved by THE ROYAL CANADIAN GOLF ASSOCIATION, R&A RULES LIMITED, and THE UNITED STATES GOLF ASSOCIATION Effective January 1, 2004

But for the longest time, the R&A governed Canadian golf.

I also believe that the RCGA follows clubmaking rules as set out by the USGA (ie COR limits, etc)

Important to me 'cos my friend uses a Fusion II golf club!

1) If you look at the link I posted you will see that the Rules are copyright R&A and USGA, not RCGA.
2) The RCGA administer the Rules on behalf of the R&A.
From the R&A website
The R&A is golf's world rules and development body and organiser of The Open Championship. It operates with the consent of more than 125 national and international, amateur and professional organisations, from over 110 countries and on behalf of an estimated 28 million golfers in Europe, Africa, Asia Pacific and The Americas (outside the USA and Mexico). The United States Golf Association (USGA) is the game's governing body in the United States and Mexico.
3) The clubmaking, and all other Rules are jointly made and agreed by the R&A and USGA. They are exactly the same Rules and Decisions. The RCGA do not make any rules.

I'm well aware that the RCGA simply follows along.

However, I thought the USGA made the COR limit effective immediately, whereas the R&A has given 'non-conforming COR' clubs until 2008?

Yes you are correct.

Taken from the R&A website 5 minutes ago

"Golfers throughout the world are being encouraged by The R&A to check the driver in their bag , and any driver they may buy in the future, in preparation for a rule change in 2008. The limit on the spring-like effect of driving clubs, which has applied to elite golf since 2003, will be a Rule of Golf and apply to all golfers from January 1, 2008."