Local Hosting vs Overseas Hosting - Difference in Rankings?

I have a client in Canada who's completely dominating on Google.ca, his hosting is based in Toronto. I have another client in Hong Kong who's doing really well for a few keywords that are very similar, but not across the board. The client in Toronto is on the 1st page for 7 target keywords + variations, whereas the Hong Kong client is on Google.com.hk 1st page for about 3 keywords but barely any variations/other keywords we're targeting. The Hong Kong based client's hosting is based in Toronto as well.

Would it make a difference in terms of local rankings if we switched the Hong Kong client's hosting to Hong Kong as opposed to being in Canada? (Site speed is a non-issue, we're getting great load times).

It doesn't matter the hosting location but the quality of the content and SEO.

Yes, there will be a lot of impact for local hosting, Google will give more priority for the local hosting sites in ccTLD, it is one of the rankings factor even, check for more in SERP's.

Definitely, there will be impact for local hosting for local sites rather than global sites, but not in all cases.

In your case, if you feel that your client business is only from Hong Kong, then yes suggest him to change from canada hosting to Hong Kong hosting and sure you will see impact in rankings and also get quality back links from local sites, to gain quick rankings in local

Hosting in local area will surely help in ranking for a keyword in google cctld. It increases ur page speed also.

Local hosting is not necessary, but it does have an impact on rankings. If you have high quality content and links it won't matter, but hosting is cheap and for the easy rank boost it might be worth changing to a local host.

I dont think thats a factor, what matters is speed and seo.

The closer the people are to the host, the faster the site will load. So, it makes sense that your site might rank better if it's hosted in the country of your targeted audience.