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Kirk beat me to it but yes prostitution is legal in Canada. I see no reason for it to be illegal.
What should be illegal is pimping. This is where the majority of the problems come from.
The other problem is street hooking. This is a nasty scene that has a very low threshold for entry and is frequently associated with hard-core drug use and pimping (read: exploitation and abuse of women).
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"My hands are on fire. Hands are on fire. Ain't got no more time for all you charlatans and liars."
- Old Man Luedecke
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