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A lot of places near the border will accept a U.S. dollar for a Canadian dollar, but that's because the exchange rate is favorable. In general you need to use Canadian currency, which you can easily obtain by exchanging your U.S dollars at any bank in Canada and most in the U.S. You can also use traveler's checks and credit cards at places that accept them, but the fees for the former and sometimes poor exchange rates for the latter may make it more expensive to do so.

Typically using a credit card will get you a favorable exchange rate, as the company does it in much larger quantities, reducing the overhead. Most border crossings have an money exchange.

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