Admittedly I haven’t been through the Japanese school system or had a child do so (and I’m not a huge fan of the Japanese school system anyway), but I’m not sure such pessimism about the system in Japan compared to Canada is warranted.
In the past year or so, the problem of school bullying has gotten onto the public radar in Japan in a big way — in fact this itself is probably one reason bullying is becoming more visible — it’s being reported more (which is a good thing). Yes, this concern will likely die down somewhat in the future if kids stop offing themselves, but precedents have been set — schools have changed their policies, teachers have been let go. I don’t want to downplay the problem or make it sound like it’s going to change overnight; I just don’t think that being fearful before the fact is necessary — concerned and cautious, sure.
And with regard to the situation in our home countries, well perhaps it was better (although the UK is especially notorious in this area), but people have famously poor recollection of the bullying that went on around them in their childhood, unless they were the ones being bullied. A handful of poor bastards at my school were taunted, beaten and robbed practically daily. A couple of teachers taunted the unpopular kids in front of the class, just for fun. I remember one PE teacher in particular had such disgust for the weaker kids’ inability to defend themselves that he really egged on the rest of the class to push them around. And about the racial angle, well minority kids (mostly the east & south asian ones) took a fair bit of racial taunting even in my multicultral Canada. I would think that part at least has improved in the past 20 years or so, but still…

This article reminds me of a book I’m currently reading.

“Shutting out the Sun: How Japan Created it’s Own Lost Generation” by Michael Zielenziger. It was published in late 2006 so it’s pretty up-to-date. It discusses the state of the Japanese school system and the general culture around bullying and how prevalent it is.
It’s main focus is the hikikomori of Japan (or people (mostly young men) that shut themselves inside their rooms for months or years at a time unable to deal with Japanese society). The book contains several interviews with hikikomori and friends and family of those affected. A constant theme of bullying and breaking down under the stress of constant competition in school seems to be the spark for the condition in every single instance through-out the book.
It’s a pretty comprehensive book on the topic. I highly recommend it to anyone who wants to learn more about some of the problems brought up in the Newsweek article.

Please do read the book about bullying written by Trix van Dugteren!