I read this thread on my Blackberry while waiting at the vet's office and I haven't been able to stop thinking about it. To the OP, I am so outraged on your behalf! I cannot believe that any boss would say anything so discriminatory, insensitive, unfair and downright stupid in a public meeting!!
However, the fact that he was dumb enough to say it in public may work to your advantage. If I understand correctly your contract with this company was not renewed -- I'm sorry. If you can at all afford it, I would definitely consult with a labor/employment lawyer. I'm no lawyer, but it seems like if a boss makes discriminatory comments in public about an employee, then that employee is fired/not rehired, that would make a pretty strong cause for a lawsuit. Definitely worth checking into, at least.
And I have to echo others who have been shocked by some of the reactions here. It doesn't matter whether parents are distracted by parenthood (and obviously it is arguable whether or not this "distraction" negatively affects work performance, on the whole). Discrimination against parents is wrong, period. It seems bizarre that I would have to type that sentence out on MDC, but there you go.
The notion of not hiring women of childbearing age because of mat leave is so disturbing. Going by this logic, really employers shouldn't hire women at all -- because women of any age are far more likely to have family-caretaker responsibilities. Women age 40-60, for instance, are far more likely than men of the same age to be the primary caregiver for an elderly parent. That does not excuse discrimination. This is why we have laws to protect us.
I lived in Canada for the past three years and yes, I'm well aware of the disruptive effect that one-year mat leave can have on a business. The solution is not to discriminate against women (or parents), the solution is for employers to put on their big girl panties and DEAL WITH IT. One-year mat leave has been standard in Canada and lots of other countries for a long time now, and the economy hasn't collapsed yet. (Well, not from that...) ESPECIALLY in this job market there are tons of qualified people who would apply for a one-year job. The small-business excuse just doesn't wash with me, sorry.
Finally, the idea that the OP should just get a job at a more family-friendly company ...

Yeah, maybe he could score a job hanging candy canes on sugarplum trees in the magical forest of fairyland. I hear they have great parental leave policies. Seriously, in this economy you've got to take whatever you can get. Unfortunately, that leads to a lot of employers thinking they can get away with discrimination like this. And that's just wrong.
Sorry for the rant, I guess this situation just really struck a nerve with me. Best of luck to the OP and his family.