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I'm In US - Is there a Penalty if my Host is in Canada

4:36 am on Apr 4, 2007 (gmt 0)

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My company is US based and I use a host server in Canada. With all this revamping of the Google alg, the UK sites noticed a problem with G that I hope was remedied. It appears that G is taking notice of where websites reside.

Could my site be falling in SERPs because my host is in Canada?
Is there any downfall to SE ranking that can happen?

Matt Cutts noted a problem about a .com being hosted outside the US, but this is unclear to me.

Thanks for your thoughts.