It may not be required to have a passport getting into Canada, but I believe you need one when going back to the US.
From US Department of State website
http://travel.state.gov/travel/cis_pa_tw/cis/cis_1082.html
"ENTRY / EXIT REQUIREMENTS: Entry into Canada is solely determined by Canadian Border Services Agency (CBSA) officials in accordance with Canadian law. Please see the CBSA’s website for details. Canadian law requires that all persons entering Canada carry both proof of citizenship and proof of identity. A valid U.S. passport, passport card or NEXUS card (see below) satisfies these requirements for U.S. citizens. If U.S. citizen travelers to Canada do not have a passport, passport card or approved alternate document such as a NEXUS card, they must show a government-issued photo ID (e.g. Driver’s License) and proof of U.S. citizenship such as a U.S. birth certificate, naturalization certificate, or expired U.S. passport. Children under sixteen need only present proof of U.S. citizenship. (Please see below for important information concerning re-entry into the United States).
When returning to the United States from Canada, it is very important to note that all U.S. citizens are required to present a valid U.S. passport to enter or re-enter the United States via air. For entry into the United States via land and sea borders, U.S. citizens must present either a U.S. passport, passport card, NEXUS card, Enhanced Drivers License or other Western Hemisphere Travel Initiative (WHTI)-compliant document. The only exception to this requirement is for U.S. citizens under the age of 16 (or under 19, if traveling with a school, religious, or other youth group) who need only present a birth certificate (original, photocopy or certified copy), Consular Report of Birth Abroad, or naturalization certificate."