Is it wise to appoint a power of attorney that lives in another country?

There are two basic types of Power of Attorney: One governs finances, the other governs medical decisions. This latter type may go by various other names, including: advance health care directive and durable power of attorney for health care.

I cannot tell from your question which type of PA you are concerned with.

Some but far from all states have laws governing where the person given authority to act (called the "attorney-in-fact" or the "agent" must reside.I do not know the law of every state on this question. If I had to bet, I'd go for "no state law applies here." But I'd must prefer not to bet, but to learn the law of the state where your aunt lives. I doubt if that fact that your aunt's agent lives in a foreign country power would disqualify her from serving under your aunt's power of attorney.

Assuming no law prevents your aunt from appointing a niece who lives in Canada as your aunt's agent, we reach the question of if this is a wise decision. That depends on how your aunt viewed her options and alternatives for naming her agent, and why she decided to chose the person she did. Certainly there can be drawbacks with having an agent who lives far away. If financial or medical decisions must be made quickly, it is generally wise to have the agent live nearby. But there may be other concerns your aunt has that outweigh the possible inconvenience of having her agent live far away.

It's not for me to say what is wise, when I do not know all the circumstances. Perhaps you could discuss this matter with your aunt, and see if she had what she considers good reasons for the decision she made.