In Ontario, a moped is considered a motorcycle by the MTO unless ALL of the following apply:
1. The engine displacement is 50cc or less.
2. The moped has pedals.
3. The pedals can be used at any time to propel the vehicle.
4. The moped weighs under 120lbs.
5. The moped can not go faster than 50km/h on level ground.
6. The moped must be automatic.
You need a regular (class G) driver's license to ride a moped in Ontario and you have to wear a helmet. Check out here for more info: http://torontomopedclub.hypermart.net/Moped_Info/Ontario_Laws/ontario_laws.html
The pedals are only used to start the vehicle (they don't have starters). The engine does not stop running unless you turn it off so you don't have to pedal everytime you want to start moving. Although, in emergencies, you can get around by pedaling, I wouldn't recommend it for more than a kilometer as mopeds do not make very good bicycles! If you are going up a very steep hill you can assist the engine by pedaling but you don't have to.
If you're going to get a moped I'd strongly recommend you get an older one from the seventies or early eighties (they stopped importing mopeds into Canada in 1982 because of stricter emission laws but there are plenty around). Search around on the internet and you can probably pick one up for between CDN$500 and CDN$1000. I've found many mopeds through the classifieds at www.moped.org. The "classic" mopeds are easier to fix and look cooler; but finding parts can sometimes be a pain. If you could find an old Puch or a Honda PA-50 you'd be set.
Personally I don't like the look of the newer plastic [Tomos] mopeds. It looks like they're pretending to be motorcycles. Of course that's just an aesthetic complaint --I understand they are very good machines.