I renewed my passport last year. It took about three weeks to turn the renewal around. If you've been waiting since March 24, I suspect you may not have to wait much longer, so don't despair.
The US Goverment has proposed requiring that everyone crossing the border from Canada to the US have a passport starting (I think) late next year. This is a controversial proposal, not because of those who are flying between major cities in the US and Canada, but because of the inconvenience and potential economic disruption for the folks who live near the border and drive across as part of their day to day activities. Many of those folks haven't traveled more than 50 miles from their place of birth and have never had a passport. The Canadians have been opposed to this proposed policy. Years ago, I was visiting International Falls, MN, and for lunch my client chose to drive across the border to a restaurant in Fort Francis, ONT.
But as far as I know, the new requirements have not formally taken effect yet. That said, if the Canadian consulate says you need a passport to get into Canada, then you need a passport. The consulate speaks for the Government of Canada. I don't know what is going on there - it could be an administrative policy to demonstrate the problem that requiring passports would have in those border regions. But what is clear is that if there is a new requirement that you must have a passport, it is because the Bush administration proposed that requirement.
I've traveled to Canada many times on business. When flying, I have always used a passport - it's one of the permanent fixtures in my briefcase. Two weeks ago today, for the first time in many years, my wife and I drove to Canada. We both had passports, and the experience getting into Canada was a non-event. We had to wait longer to talk to the customs/immigration officer than we actually spent talking to her.
Returning to the US three days later was a different story. First, the line was much longer, and moved much more slowly. And the homeland security guy (he was doing his job - no complaints about that) seemed to feel that there was something sinister about our desire to drive through the backwoods of Vermont on a beautiful Sunday morning rather than come down the boring Adirondack Northway. But it was worth the hassle - we had a delightful lunch at the Dog Team in Middlebury, a restaurant we last visited more than 30 years ago.
