LANDED!
Went to Carway land border this morning and landed without problem. However, the US border security made it VERY clear that we need to declare this refusal if requested in the future, if questioned.
Also, on the Canadian side they mentioned that unless someone is visa-free to Canada or has a Immigrant Visa in their passport that is close to expire, it is strongly recommended to not use the flagpoling method. When I asked the reasons why, he said that several times a week, someone tries to do this, and something is not in order with their paperwork, or even something that was a mistake made on the CIC end on the computer they put the officer in a difficult position as the person cannot enter the USA and doesn't have legal status in Canada, something obviously everyone wants to avoid. I let him know that CIC told us to go to the border to do this, as we didnt have time to book an appointment in Calgary. To this, he replied that they are not CIC so if there is some kind of issue on the CIC end he cant do anything about it...... He was friendly but firm the entire time.
Seems like a bit of a internal disagreement between the two government entities, but might be good to know for others that they will ask why you are doing it with this method.