FWIW the Sears Canada Financial Mastercard by Chase does not charge an additional conversion transaction fee on top of the currency exchange. It saves me 2% right off the top on all US purchases over my other credit cards, debit card purchases or ATM cash withdrawals.
Not sure if US citizens can get a similar Chase US card that has the same privileges going the other way?
Most retailers close to the border in Canada accept US funds, but don't expect consistent exchange treatment every time and as has been stated change will be in loonies and toonies with no pennies.:W