If you were actually in Canada performing the service then taxes would generally apply. The Canadian busienss would withhold payments to Non-residents 25% tax on amounts subject to Part XIII tax (taxable amounts). However, this rate can be reduced to a lower rate or an exemption can be given under the provisions of the Income Tax Act or a bilateral tax treaty.
The tax treaty between the US and Canada does allow for certain exemptions on the tax. It woudl depend how long you were in Canada.
Under the treaty, U.S. residents who earn income in Canada are only subject to Canadian income tax on certain types of income, including income earned from employment in Canada, income earned from business conducted in Canada, and capital gains derived from taxable Canadian property. In turn, Canadian residents are only subject to U.S. income tax on income effectively connected with a trade or business in the United States and income from the United States that is fixed, determinable, annual or periodical.
The treaty provides exemptions for employment income below $10,000 a year (in the currency of the country in which the work is rendered). Individuals may also be exempt if they earn more than that amount, but are not physically present in the neighboring country for 183 or more days in the 12-month period, and if the income is not paid by or on behalf of a resident of the neighboring country.
As they already withheld you can claim a tax credit on your US return for the taxes withheld in Canada. Form 1116 is used for this.