Moneris was processing, but a few months back I believe they stopped. Big Cock Society had been using them and suddenly found themselves without a processor. They did find alternate processing, but not in Canada.

I'm in Canada and essentially if you're in Canada at the moment you are fucked. You either need to set up a U.S. corp or set up an off-shore company with Gibraltar or Singapore or something like that. Deleware is apparently a good place to set up your U.S. corp, and I believe it has to be a physical address and not just a mail drop box.

You're other option as a Canadian is not to run a paysite, but instead run AVS/AEN sites, set up theatres with other systems that process and provide the content, and run link lists and TGPs and send your traffic to other sponsors. This leaves you in a precarious position because if the U.S. government or VISA changes the requirements as to not allow U.S. companies to send cheques to Canada, you're screwed. But that's unlikely unless someone else flies a plane into a building and it's discovered they came from Canada.

If any processor yes they can process for you and don't require a U.S. corporation, I'd be highly suspect and investigate it thoroughly. Chances are really good they'd be lying to you. Believe me, I've been looking for a Canadian alternative for over two years, if one existed I'd have found it by now, I'm a tenacious bugger.

Cheers
Dzinerbear