Are Canadian applicants favored in graduate admissions or funding for Canadian graduate programs? I'm not sure if this question is off-topic here, but I have applied to some Canadian master's economics programs as an international student along with my Canadian classmates. Even though I have a better academic record than they do, I didn't get into the schools with as much funding as my Canadian classmates. My question is why is it so? Based on my knowledge and experience, I don't think that schools in US have this type of a double standard policy, as I received enough funding from some public universities there. I know I could be wrong as I may well be generalizing.
Without knowing the details of your classmates funding, it's difficult to say whether there's bias. Having said that, Canadian students will be at a definite advantage when trying to get funding at a Canadian University.

For some students, funding at the Masters level will be formed from multiple sources: 


Government Scholarships. Some of these are open to international students, others are not. For example, the NSERC Vanier scholarships accept international applicants, but the NSERC CGS M does not.  
University scholarships: These are typically funded from a variety of sources which will have varying requirements. Some must go to students from Canada, some must go to international students, some are purely merit based. 
TA/RA-ships. My experience is that these typically aren't restricted based on international status, but I can't say for sure. 


So, it's easy enough to imagine that your friends funding could simply include scholarship money that is unavailable to you as an international student. Most universities realize that international students aren't on perfectly even footing, and will have sections of their websites dedicated to funding for international students. This could be of great help for you, though the money  might not come soon enough for you to be able to make it work. 

Another thing to mention, is that some countries have scholarships for outgoing international scholars. These vary hugely, but should also be considered.