Sounds like houses are actually getting smaller these days, in everywhere but Alberta! In Alberta we have a plethora of choice when it comes to housing. We have great condos if you're one for living smaller as well as fairly reasonably priced single family dwellings if space is your thing.
I, personally, prefer a smaller space for myself. Living in a small space affords me more time to do things I want to do (like hanging out in our amazing river valley) instead of spending too much time cleaning and maintaining my home. But, if you have a family I can definitely understand the need for more space. The great thing about living in Edmonton is you really can have whatever lifestyle you want in the type of home you choose! Small, big...urban or suburban. It's all here.