Although the information supplied so far has been sound, it is not the case that items brought into Canada from the U.S. are duty-free regardless of their country of origin.  For example, clothes purchased in the U.S. are often considered to be "duty-free" , but any clothes not manufactured in the U.S. should actually be charged duty.  Canada Customs has simply agreed to turn a blind eye to this practice.  Similarly, it would not be the case that a pin manufactured in say, Germany, would be duty-free just because it is going from the U.S. to Canada.  Goods must be manufactured in the U.S. ( or Mexico ) to qualify for the NAFTA treatment.

At least that's my understanding.