But what about the Australian Canadians?

This is a couple months old, but I myself just learned about it (initially via BoingBoing): in the South, "Canadian" is being used as a code word for "black":

It was a routine e-mail from the boss sent to congratulate a junior prosecutor in Houston, Tex., who had won manslaughter convictions against an intoxicated driver.

"He convicted Mr. Sosa of a double intoxication manslaughter, got a weak jury to give him 12 years in each, and then convinced Judge Wallace to stack the sentences," Harris County assistant district attorney Mike Trent wrote in an office-wide memo. Then came the odd part: "He overcame a subversively good defence by Matt Hennessey that had some Canadians on the jury feeling sorry for the defendant and forced them to do the right thing."

The e-mail was sent in 2003 but came to light only this month as part of an unrelated controversy with his office, forcing Mr. Trent to defend himself against accusations of bigotry -- not because he offended the people of Canada, but because "Canadian" has apparently become a code word for blacks among American racists.

...

An online directory of racial slurs defines Canadian as a "masked replacement" for black.

Last August, a blogger in Cincinnati going by the name CincyBlurg reported that a black friend from the southeastern U.S. had recently discovered that she was being called a Canadian. "She told me a story of when she was working in a shop in the South and she overheard some of her customers complaining that they were always waited on by a Canadian at that place. She didn't understand what they were talking about and assumed they must be talking about someone else," the blogger wrote.

"After this happened several times with different patrons, she mentioned it to one of her co-workers. He told her that 'Canadian' was the new derogatory term that racist Southerners were using to describe persons they would have previously referred to [with the N-word.]"

A similar case in Kansas City was reported last year on a Listserv, or electronic mailing list, used by linguistics experts. A University of Kansas linguist said that a waitress friend reported that "fellow workers used to use a name for inner-city families that were known to not leave a tip: Canadians. 'Hey, we have a table of Canadians.... They're all yours.' "

The "online directory of racial slurs" is the Racial Slur Database, found here. CincyBlurg's post on the issue is here. The Language Log has a post with links to the Listserv mentioned in the final paragraph.

This page has some more on that Texas case (though if you really want to know more, go here). It also includes this gem:

Canadian is the racist code word for Nigger, like Australian is the code word for gays

Isn't it fascinating what people will do in order to cling to their bigotry yet avoid societal repercussions for it? Really, this is brilliant--Canada is a majority white, so people wouldn't suspect you were using the word to refer to black people. But it's also a fact that most Americans wouldn't care if you slander someone by nationality rather than race (or even sexual orientation)--and especially not in the case of Canada, the brunt of so many American jokes. You could talk about how stupid you think "Canadians" are, or how violent they are, and you might get some weird looks ("Violent Canadians?") but wouldn't face the stigma of racism.

I don't know about the rest of you, but I am enthralled by this revelation.