If I live in Ontario but commute daily across the border to work in the US, how am I taxed?

If you live in Ontario and commute daily to a job physically performed in the US, you're taxed by both countries on the same income, though the treaty and Canadian domestic rules work together to prevent that from meaning double the tax. As a Canadian resident, Canada taxes your worldwide income, including your US wages; the US also generally taxes wages earned from services physically performed within its borders, regardless of where the worker lives, so both countries have a legitimate claim on the same paycheque.

The relief comes through the foreign tax credit: Canada, as your country of residence, generally allows you to claim a credit against your Canadian tax for the US tax properly paid on those wages, up to the amount of Canadian tax otherwise payable on that same income, so you aren't paying full tax twice on the same dollars. Getting US withholding and Canadian instalments or withholding coordinated through the year, rather than facing a large reconciliation only at filing time, takes some planning.

Because daily commuting arrangements are common enough along parts of the border that this is a well-trodden path, but the mechanics still require care each filing season, a cross-border-experienced preparer is genuinely useful for someone in this situation rather than a luxury.