Canadian grad school operates different than what is typical in the US. Yes, it is very typical for Canadian students (or any student for that matter) to require a masters' degree to enter a Ph.D. program at Canadian universities. Basically, much of the coursework part of a typical American Ph.D. program would be done at the masters' level in Canada (although it is different than the UK system where a Ph.D. still has a coursework component). Basically the system uses a masters' degree as a stepping stone rather than something you just get along the way.
As for the quality, generally, University of Toronto/McGill/UBC are really the only universities in the country that can stack up to top 50 universities in the US. The aforementioned 3 are pretty good schools, with University of Toronto generally being the best, and are definitely taken seriously in the US. There is a caveat however, I would advise against doing a Ph.D. at a Canadian university. It's unlikely you would be able to find a TT position in the US with a Ph.D. from a Canadian university, even from University of Toronto or McGill.
If you are interested in doing a masters' degree for any potential reason out of many, doing one in Canada can actually be quite a good move. You will probably receive enough funding to completely pay for your tuition and possibly your living costs as well.