Would you worry about it if the categories are somewhat useful for users to drill down the content?

For example:
/product.html
/aluminum-baseball-bats/product.html
/little-league-baseball-bats/product.html

They don't sell bats but it is the easiest way to describe it I guess.  In this cause would you still 301 redirect the two longer urls to /product.html

Thanks that is what I was thinking, I just need to know more about if the bots will follow the canonical's past one level when pointing to a different domain and if so how many levels on the different sites.

Interesting idea, I might have to do that.  Right now I have canonical elements on the .com

It is a magento store so it creates dirty duplicate content when the products are in different categories out of the box, for example magento creates the following product pages:

domain.com/store/productcategory1/product.html
domain.com/store/productcategory2/product.html
domain.com/store/product.html

In this case I have canonical elements pointing the categories to the main root domain.com/store/product.html

So you think it would be better to do a 301 redirect for the different product urls that are in subcategories?

We are fighting some duplicate content issues across multiple domains. We have a few magento stores that have different country codes. For example: domain.com and domain.ca, domain.com is the "main" domain.

We have set up different rel="alternative codes like:

The question is, do we need to add custom rel="canonical" tags to domain.ca that points to domain.com?

For example for domain.ca/product.html to point to:

Also how far does rel="canonical" follow?  For example if we have:
domain.ca/sub/product.html canonical to domain.com/sub/product.html
then,
domain.com/sub/product.html canonical to domain.com/product.html