Oh my goodness. I am pretty much garden variety white, fair skin, blue eyes, dark hair, but mom's dad was half native American or Mexican (such a brutal upbringing he never talked about them so she didn't know for sure beyond "Oklahoma"), she looked more native in features, I got some of that and what I got asked down here when young is "what are you?"
It may be your accent but maybe it's your looks. I think just responding, "Canada, what about you?" is correct.
As to why people care, I don't rightly know. Maybe they think you might like to talk about it, or like to put people in boxes or don't know you and are trying awkwardly to make small talk.