Step 1 :\(\text{a) Calculate the total amount of dog food needed for 3 months:}\)
Step 2 :\(\text{Total dog food per week} = 3.5 \times 16 \times 7 \text{ kg} = 392 \text{ kg}\)
Step 3 :\(\text{Total dog food for 3 months} = 392 \times 3 \text{ kg} = 1176 \text{ kg}\)
Step 4 :\(\text{Convert kg to lb: } 1176 \text{ kg} \times 2.20462 \text{ lb/kg} = 2592.24 \text{ lb}\)
Step 5 :\(\text{Calculate the number of bags needed: }\frac{2592.24}{25} = 103.6896 \)
Step 6 :\(\text{Steve needs }\boxed{104}\text{ bags of dog food for 3 months.}\)
Step 7 :\(\text{b) Calculate the cost in Canadian dollars:}\)
Step 8 :\(\text{Total cost in U.S. dollars} = 104 \times 28.95 = 3010.8 \text{ USD}\)
Step 9 :\(\text{Total cost in Canadian dollars} = 3010.8 \times 1.06 = 3191.448 \text{ CAD}\)
Step 10 :\(\text{The three month supply of dog food will cost }\boxed{\$ 3191.45 \text{ CAD}}\)