I can't speak for the Canadian side, but I grew up in El Paso. El Paso is right on the Mexican border with another large Mexican city on the other side, Juarez, and a fair amount of travel in both directions. On the US side, everything is done in dollars. On the Mexican side, pesos or dollars both generally work. I can't answer how Mexicans get ahold of dollars -- it's just never been a problem I've had to solve. I would suspect it's similar to when I've gotten local currency outside the US. There are currency exchange places, though I've only seen them in airports, your CC does the conversion automatically, an ATM does, or you go to a bank.