No, that's not right. First, the IRS has Form 2555 which excludes just about $100k of foreign earned income from taxation. You still have to file a declaration, but you won't have to pay US taxes. Second, even if you didn't have Form 2555, there is a tax treaty between the US and Canada. Under the tax treaty, any tax you pay in Canada offsets tax you would otherwise have to pay in the US. So, even absent foreign earned income exclusion, if you earned $100k in Canada and paid $30k in taxes in Canada, the US would allow you to offset those $30k in taxes against any US tax owed. So, if you owed an effective rate of 28% in the US on that $100k, you'd owe nothing in the US. If your effective rate in the US was 35% when you only paid $30k in Canada, you'd owe $5k to the US (even though you weren't a resident there and didn't live there). For Canadians, if you reside in the US, you don't owe Canada anything because, although Canada taxes you on your worldwide income while you are a resident, if you aren't a resident, you don't owe anything. Finally, "living off cash" to avoid paying US taxes puts you in the tax evasion category, where there can be criminal penalties, and will also really limit your employment opportunities in Canada if you're only going to accept jobs that pay under-the-table wages. And you'll also be evading Canadian taxes, because filing Canadian taxes when you're an American takes you out of the "living off cash" category. You can live off your spouse's income, though, and then you won't pay taxes in Canada or the US ( you'll need to file in Canada to have access to some of the cool subsidies, but if you've got no income you've got nothing to file in the US!).
The FBAR and FATCA forms are more complicated and are interested in your access to assets (including signing authority, even if the money isn't yours!). Having a mortgage won't trigger them because a mortgage is a debt, so it's not a financial account. Having a joint account with your spouse when that account has more than $10k on any given day in the year WILL trigger it (even if you didn't put it in there). The good thing is that just having the money in an account (or multiple accounts that exceed, in the aggregate, the threshold amount) doesn't mean you have to pay interest or a penalty. The bad thing is that you have to file the FBAR and/or FATCA forms, and the penalties are stiff if you don't file the form. Financial accounts are defined broadly, so brokerage accounts, checking accounts, savings accounts, your kids savings accounts for which you are the trustee, the accounts at work you have a right to sign (if you are a drug store manager and can sign company checks for suppliers or payroll - whoops - you might have a problem!). It's really broad.
So, the US is like a very jealous wife. If you stray and start living in some other country, she gets cray-cray.
