My stargazer lilies have been getting smaller and smaller flower heads over the last years. Also the bulbs are blooming less or the past years. Do they need to be dug up and divided? I live in Canada were we get snow and colder temperatures - does that affect the bulb over winter?

You did not mention anything about more stems growing which indicates the bulbs divided and sare now crowded. However, many bulbs get deeper each year because the new bulb forms beneath the old bulb or slightly below and to the side of the old bulb. The more soil the stem has to be pushed through, the less energy left for flowering - not only in size but also in numbers. There once all the foliage and stems have turned brown and died, dig up and replant at a shallower depth. Add about a tea sppon of bone meal to the bottom of the hole you put the bulbs back in.