Not quite, believe it or not.
First of all, "escorts" in the strict sense of the term are not illegal. It is not illegal to hire a good-looking women to accompany you when going out or something to that effect...which is of course what these "escorts" are offering, right?
Prostitution, which in reality is what many of them are doing, is not illegal in Canada either, although soliciting is illegal. Basically it's a situation where everyone knows what they are really doing, but nobody says it.
There are also just too many for the police to shut down. The police occasionally bust a few to try and make a difference and prove a point, but by and large most get away with it most of the time.