You do not need a passport to enter Canada.
If you are returning by air you need a US passport or proof of application for a US passport to re-enter the US. See * below.
http://travel.state.gov/travel/tips/brochures/brochures_1229.html
CANADA – Passport or
proof of U.S. citizenship such as a birth certificate, naturalization certificate, and photo ID required. Minors (under 16) traveling alone or in someone else’s custody must present written authorization, signed before a notary, from the parent(s) or guardian. Visas are not required. Canadian immigration officials at ports of entry will issue persons planning to stay longer than 180 days a visitor’s record. Anyone with a criminal record (including a DWI charge) should contact the Canadian Embassy or nearest Consulate General before travel. U.S. citizens entering Canada from a third country must have a valid passport. HIV testing required for resident applicants who are over 15. A temporary resident applicant requires immigration medical examination if stay exceeds 6 months or seeking to work in Canada. For student or business travel, check with the Canadian Embassy, 501 Pennsylvania Ave., NW, Washington, DC 20001 (202/682-1740) or the nearest Consulate General: CA (213/346-2701), MI (313/567-2085), NY (212/596-1700 or 716/858-9501), or WA (206/443-1375). Internet:
www.canadianembassy.org
*
http://travel.state.gov/travel/cbpmc/cbpmc_2223.html
U.S. citizens traveling to Canada, Mexico, Bermuda or countries in the Caribbean region who have applied for, but not yet received passports, can re-enter the United States by air by presentation of a government issued photo identification and Department of State official proof of application for a passport through September 30, 2007. The federal government is making this accommodation for air travel due to longer than expected processing times for passport applications in the face of record-breaking demand.
The Western Hemisphere Travel Initiative (WHTI) was mandated by Congress in the Intelligence Reform and Terrorism Prevention Act of 2004 to strengthen border security and facilitate entry into the United States for citizens and legitimate international visitors. WHTI requirements for air travel took effect on January 23, 2007.
Adults who have applied for but not yet received a passport should present government-issued photo identification and an official proof of application from the U.S. Department of State. Children under the age of 16 traveling with their parents or legal guardian will be permitted to travel with the child’s proof of application status. Children traveling alone should carry a copy of their birth certificate, baptismal record or a hospital record of birth in the United States in addition to their passport application status documentation. This accommodation applies to all American citizens who apply for passports, until September 30, when this accommodation period ends. U.S. citizens with pending passport applications can obtain proof of application at:
http://travel.state.gov/passport/get/status/status_2567.html.