The US has established a network of bilateral Social Security agreements that coordinate the US Social Security program with the comparable programs of other countries.- http://www.ssa.gov/international/agreement_descriptions.html
As we could see - there is an agreement between teh US and Canada - http://www.ssa.gov/international/Agreement_Pamphlets/canada.html
Part IV - the table shows the various types of Social Security benefits payable under the U.S. and Canadian Social Security systems and briefly describes the eligibility requirements for each type of benefit.
If you do not have enough work credits under the U.S. system to qualify for regular benefits, you may be able to qualify for a partial benefit from the United States based on both U.S. and Canadian (CPP/ QPP) credits. However, to be eligible to have your Canadian credits counted, you must have earned at least six credits (generally one and one-half years of work) under the U.S. system. If you already have enough credits under the U.S. system to qualify for a benefit, the United States cannot count your Canadian credits.
I hope that helps.
in other words - you concern if Windfall Elimination Provision (WEP) will affect your wife's Social Security benefits - that she will receive based on your earning record.
Please refer to the SSA Publication No. 05-10045 - http://www.ssa.gov/pubs/10045.pdf
Yes - her Social Security benefits may be reduced if she qualify for Canadian CPP
the Government Pension Offset covers situation if a person is eligible for US government pension and social security benefits at the same time - so that is not your situation.
the US-Canada tax treaty covers situations for taxability of benefits - and not eligibility for benefits
the US-Canada Social Security agreement provides - see above - that if the person doesn't have enough work credit to qualify for social security benefits - Canadian credits may be taking in consideration - that is exact your situation - because your wife doesn't have 40 US credits - she may add Canadian credits and would be qualify for US social security on her own record.
She may however apply for SS benefits based on your record - and in this case you need to decide which way is more beneficial.
However if she is eligible for Canadian CPP/ QPP benefits - she would be exactly under the Windfall Elimination Provision. - please see the US-Canada Social Security agreement Part V -- A CPP/QPP pension may affect your U.S. benefit
If you qualify for Social Security benefits from the United States based only on U.S. credits and a CPP/QPP benefit from Canada, the amount of your U.S. benefit will be reduced. This is a result of a provision in U.S. law which can affect the way your benefit is figured if you also receive a pension based on work that was not covered by U.S. Social Security. Receipt of a Canadian Old-Age Security pension, which is based on residence in Canada, will not affect the way your benefit is figured. For more information, call our toll-free number, 1-800-772-1213, and ask for the publication, Windfall Elimination Provision.
There are probably lots of people who receive foreign pensions (equivalent of US SS benefits) and do not inform Social Security Administration to avoid the affect of the Windfall Elimination Provision.
However - because of the US-Canada Social Security agreement - I believe that SSA might exchange the information with Canada.