OK I've just figured it out the next user who runs into this issue.

Make sure the Country field for the contact is set to Canada and not defined
as CA which was my mistake due to a different contact management database I
had been using prior to Outlook 2007.

Make sure the country field is set to the country value of the drop down
field.

"G Gerhardt" wrote:

I've found that Outlook 2007 on my Vista PC where the regional settings is
set as ‘Canada’ displays contact address format as follows
Postal Code City Provance
Which is proper for the American layout of a mailing address. By contrast
for Canada this is backwards....
It should be:
City Provance Postal Code
How do we get it to display properly for Canadian contacts? I've manually
fixed most of my contacts but this is a major headache especially if
importing contacts from other sources. Moreover the display will flip back
to the American layout even after the manual display change.
Thanks.