Depends what you mean be "the classic North American urban planning problems" (maybe you could specify). We certainly have the problems of urban sprawl, traffic congestion, and car dependance no less than most Canadian cities. I think it actually makes it even harder to pull off a functional transit system when you don't have one downtown core with a very large number of people working there. The largest is downtown Kitchener with only 12,000 workers (though will probably be around 16,000 when the Lang Tannery is renovated and moved into). However, one kind of accidental stroke of luck we have is that we have many major destinations forming a line. This is the impetus behind the current iXpress bus service and future LRT line. So while downtown Kitchener may not warrant an LRT line in itself, it lines up with 2 or 3 other downtowns (depending on the route chosen), 2 or 3 major indoor malls (depending on the route chosen), 2 universities, another major activity area, and 1 or 2 hospitals (depending on the route chosen). Collectively, this builds a spine that has a lot of potential to be built onto further. Think of the Yonge Street corridor in Toronto or Peachtree Street in Atlanta, but less significant.

Another consequence of this urban form is that you have a region with a less cohesive identity. On one hand, this adds more interest to the Region than a single downtown, inner city, with suburbs around it. On the other hand, people in the different cities don't see themselves as relating to their neighbour cities as much (whereas Burnaby is an obvious suburb of Vancouver). If you take Cambridge for example, most people in Cambridge do their shopping and other regular errands in Cambridge and don't venture further than the very southern parts of Kitchener very often unless they happen to work there or have some other extenuating circumstance (maybe if there's a concert or they're visiting friends, etc). In my case, I wouldn't know a great deal about the other neighbour cities if I wasn't doing my schooling in Waterloo. Even with Guelph, I barely ever go there, but I do know people who commute to school there, go to Guelph bars and clubs, and work in Guelph. However, they are in a separate regional municipality, so our transit systems are not co-ordinated. The hope is that GO transit can take on that role as they move west from the GTA.