Do I owe U.S. tax on a U.S. property I own while living in Ontario?

Possibly, but this answer covers only the Canadian side and the treaty, because U.S. filing duties are set by U.S. law. Under the Canada–U.S. Tax Convention, income a Canadian resident earns from U.S. real property and gains from selling it may be taxed in the U.S.. U.S. filing duties, withholding on rental income and withholding when you sell should be confirmed with a U.S. tax adviser.

Canada still taxes you as a resident, and you must report all income earned from foreign property, whatever its cost. Canada gives a deduction from Canadian tax for U.S. income tax paid on U.S.-source income. You generally claim the federal foreign tax credit on line 40500 using Form T2209, and Form T2036 for the provincial credit.

Where U.S. tax was paid, paper filers attach a W-2 slip, a U.S. 1040 return and a U.S. tax account transcript, while electronic filers keep them. If the property cost more than $100,000, Form T1135 may also be needed unless it is personal-use property. A cross-border tax adviser can confirm the details.