I believe casual crossing into the USA by Canadians and by automobile does not require a passport but it is still a preferred form of identification. Many provinces were able to issue a drivers licence that contains sufficient valid info for the Canada to USA border crossings by automobile and the return to Canada. The acceptance of alternative forms of identification, however, may be dependant on the particular Border Services Officer on duty at any given time and crossing for extended periods may well be different. Any other form of transport, (train, bus, air, boat), DOES require a valid passport to enter the USA. Pleasure Boaters are also required to have a Boat Landing Permit Form I68, which has its own set of reporting rules and is usually issued seasonally.
Americans travelling into Canada may not have the same luck. They can be refused entry on their return to USA by the US Border Services people if they cannot present their valid US passport.
The rules on sharing visitor entry and exit information between Canada and USA border control folks are changing and are not into effect just yet, but it won't be long.
Personally, I have always used my passport. As of late 2014, the Drivers Licence Plus option is no longer available in Quebec, due, it seems, to a lack of interest, but then it was a lot more costly than a regular drivers licence and had to be renewed much more often than passports which are now issued for a 10 year period.
I would have thought that carrying someone else's passport (especially non family) would have resulted in it's confiscation, perhaps it would have been if picked up on the Canadian side. But you probably did not need to show it on re-entry to Canada.