Recently travelled back to Canada with my family. I am US res. with Canadian passport. They are dual citizens. I offered their US passports and the immigration woman in Toronto said they should always try to come into Canada on their Canadian passports because it could be beneficial. I would like to know what the benefits would be because regardless of how we arrived they are still passport holders.

If you have a passport for the country you are entering you should always use that passport. In a nutshell, if you're a citizen of a country they have to let you in, so any possible issues at the border are minimized. It reduces all the "why are you visiting / how long are you staying / blah blah blah" questions and becomes a matter of 'welcome home.'

I hold dual Canadian and UK passports, and I once tried to enter the UK on my Canadian passport. I was getting a serious grilling until I produced my UK passport, at which point the officer said "You should have presented that in the first place!" and waved me through.

I'm a dual US/Cdn citizen as well, have been a Canadian resident for 7 years now and always play the passport game when crossing into either country (I'm a US citizen when travelling to the US, Canadian when coming back to Canada). From what I've heard & read (on FT and otherwise), each of those countries requires its citizens to present themselves as such, regardless of residency. Have never had problems with checking in for flights either...the agent swipes the passport regardless if I provided advance information and I think it overwrites whatever previous entry was there on the outbound leg. The only "benefit" I can think of is that entering the USA allows you to use the USA citizens line which is often much shorter when preclearing in Canadian airports. Nexus pass eliminates all these issues though!

I know it's not the exact question you asked, but U.S. citizens (including dual citizens) are required to enter the U.S. on their American passport.

I think the reasons for this rule are to prevent the odd situation where a U.S. citizen enters the United States using a foreign passport and after being issued a visa. And maybe so big brother can track our entrances and exits more accurately.

Edit: simultaneous posting... great minds think alike!

If you have both a Canadian and an American passport, it only makes sense to enter Canada with the Canadian document. Even if your American passport indicates place of birth as "Canada", that may be insufficient evidence of citizenship for the officer. You may be treated as a foreign national until the officer is satisfied that you are a Canadian citizen.

All US citizens are required by law to enter the US with their US passport. Trying to enter the US without it is a crime. Many other countries require their citizens to use their own passports. Some of the countries that require this are Colombia, Mexico, and Switzerland.

My friend holds US and Canadian citizenship. She tells me that she uses her Canadian passport when she travels in Europe and her US passport while in Latin America because she feels that the US Government has more resources in LA to help her if there's trouble.

The only benefit is not being hassled. If your foreign passport lists your place of birth as the country you are entering, it can cause a problem if you don't have the passport of that country ("Did you renounce your citizenship? What proof do you have that you currently are a citizen - we can choose not to admit you."). Also, entering your country of residence on a passport of another country (if you are a citizen of the country you are entering) can cause trouble ("How do I know that you are a legal resident your passport is from another country? I will hold you here until someone arrives with evidence." The threat was made but relented after some groveling.) I've had both occur. The remedy requires a lot of discussion (intense grilling in one case) and always has led to a warning. Carry both and present the one of the country you are entering. For a third party country it makes no difference except if there are different visa requirements.