Contrary to popular opinion, you do not necessarily need a U.S. passport in order to cross the Canadian border if you are an American citizen. Canadian law states that all U.S. citizens are required to show either a valid passport or approved alternate travel documents. There are several ways you can go about this.
Present a valid U.S. passport card. A passport card is a convenient, wallet-size travel document that enables you to enter Canada by land or sea (but not by air). The application fee in 2009 was $35. You may also present a NEXUS card as an approved travel document. A NEXUS card, which cost $50 in 2009, enables frequent travelers to cross the border with a minimum amount of screening. Both options are significantly cheaper alternatives than acquiring a first time U.S. passport, which cost $100 for adults in 2009.
If you don't have a passport, passport card, or NEXUS card, don't despair. There are still other options. In order to enter Canada by land, sea or air, you'll need to show proof of your citizenship and identity. Present your birth certificate, certificate of citizenship or naturalization, or expired U.S. passport in order to accomplish this. However, if you choose this option, be sure to carry current, government-issued photo identification such as a driver's license.
If you are traveling with a child 16 and under, you'll merely need to prove the child's American citizenship before entering Canada, unless you do not have full legal custody of the child. In that case, bring copies of all custody documents and written consent from the other parent authorizing you to bring the child to another country.
In the end, you may want to simply acquire a U.S. passport, especially if your future travel plans include more than just Canada. However, allow for plenty of time for your passport to arrive, as the standard application process may take months.
If you are planning to enter Canada by land or sea and return to the United States by air, take note: Although you may enter Canada with any approved travel document, you may not re-enter the United States by air without a valid U.S. passport.
Don't assume that border crossing policies will stay the same. Always check to see if the border crossing requirements have changed since you last traveled.
