Have they started using Chip & PIN credit cards in Canada?

Yes, they have been in use for several years now.

Although the chip terminals are commonplace now, there are still places where they do not exist. And it is quite common for a restaurant not to have the wireless terminals, requiring you to go to the cash register to pay your bill.

By October by law all terminals will have to be chip and pin.

Here in Vancouver I haven't run into an 'old' style terminal
for quite a while although some require a chip card and a
signiture esp. for large purchases.

The introduction of chip and pin credit cards in Canada is not set by law, but by the card companies (Visa and Master Card) and the issuing financial institutions (banks, credit unions etc). Adoption of chip and pin point of sale credit card devices by merchants was to have been completed by the end of March 2011, but there are exceptions such as gasoline pumps, many of which still have only magnetic strip technology.

The next step in conversion is debit cards and terminals (ATMs and point-of-sale devices) through the Interac industry association. These are are to be completed by 2015.

Canadian issued credit cards will still have magnetic strips so that they can be used in countries (i.e. the USA) which have not adopted the chip and pin technology, and all merchant chip and pin devices in Canada will accept magnetic strip cards for the benefit of those from countries which only have such cards.

You might occasionally even run into the manual system: slide the bar over your card to make carbon copies. Small or transient vendors sometimes have these still--at a flea market, for example. If you are stuck at an electronic terminal that won't read your card the merchant can always enter your number manually.