This should not be an issue either, you CAN fly into Canada from a foreign country without a passport. (just need valid ID) I have heard that some people have been hassled at a US airport when trying to fly into Canada without a valid passport, but ultimately they cannot prevent you from flying into your own country by imposing US rules on you. Canada does not have as stringent border crossing policies, as of yet.
Liz
You are right it shouldn't be an issue, but it really all depends on who get as your border guard coming back into country. (which is kind of scary if you ask me)
My great-aunt was going to my cousin's graduation in the States this past summer just after the law change in June this year requiring passports for audlts crossing the border. She had forgotten that she had gotten a passport about 3 years ago when she had planned on going on a cruise and ended up not being able to go. Because she had forgotten she applied for a passport and was actually issued a new one with no issues or questions in regards to the other passport.
She croseed into the States with no problems, but coming back on the Canadian side she was stopped by the guards and told that her passport was not valid and could not cross. She had a valid Driver's License, Ontario Health card and Birth Certificate, but they insisted she was not able to return to the Country without a proper valid passport. It took a few phone calls, conversations to the upper authorities and some convincing that an 80 year old woman posed no real threat to the Canadian country to eventually let her cross, but they detained her for 2-3 hours while discussing wheter or not they were going to.
In terms of the what I said about the children returning home. I might have misinterrupted what they were telling me as being a Canadian law (as this is the way it was presented to me by the person I spoke to at the passport office) But if US law requires:
"Canadian citizens travelling by air to, through or from the United States must present one of the following valid documents:
a passport; or
a NEXUS card when used at a kiosk at designated Canadian airports and at all U.S. airports when returning to Canada.
This requirement applies to all travellers, regardless of age, including children"
They could make it very difficult for you to get on a plane to come home. This is not something anyone wants to deal with in an emergency and was the reason I brought it up. You would hope they would show some compassion in an emergency situation, but I guess for me I was not willing to risk finding out if they would our wouldn't.