Am I aiming too high if I am applying to physics graduate schools in Canada? So I'm in the start of the process of applying to graduate school in Canada for a Masters in experimental physics, and am kind of overwhelmed and wondering about some things:


I'm not from Canada and didn't study there, but have Canadian
citizenship. How much help, if any, will this be? 
I have somewhat bad overall grades in my undergrad degree (GPA just over 3/4 in a B.Sc(Hons) of 3 years normal undergrad + 1 year higher level courses &amp; research, a high B+ in my uni's system, or 2nd class (1st division)), but am reasonably confident I can get a decent physics GRE score, having done okay on a practice test with no prep. How much would a good GRE score make up for poorish grades, and should I be limiting the schools I'm looking at to less respected ones based on this?
Between 3rd and 4th years of my undergrad, I did a 10 week summer research project, as well as the whole year project in 4th year. Would this amount of research experience be typical for students from north American universities, or not?


I was looking primarily at the University of Toronto, U of Ottawa, and Simon Fraser University, and then just sort of started feeling like maybe I'm wasting my time &amp; money even applying for them. Any help or suggestions are appreciated.
Let me start with the cheat code of Canadian admissions: in Canada, the professors in the department you apply to look at your application package and decide if they, personally, want to take you on as a student.  This means that the decision is up to the professor: if they want you, you're in; if they don't, no GPA or GRE score can save you.  So the secret is to decide who you want to work with at each school you're applying to, contact them, and convince them you would be an awesome student.  

More specifically, for each university, look at its website to find out who works in the area you're interested in.  Look for a list of research groups, such as this one for Toronto.  There will usually be a small number of professors per group; for each professor, get a list of their papers from their website.  (If they don't have such a list, which sometimes happens, try Google Scholar, but make sure you're finding the right John Smith.)  Pick the professor (or two) whose work seems most interesting to you and look at their papers in a little more depth.  Don't worry if you don't fully understand them -- if you did, you wouldn't need to go to grad school -- but try to get the general idea of what the authors did and why.  Then email the professor, briefly and politely covering the following points:


Ask if they are accepting new students this year. (They may be low on grant money, going on sabbatical, etc.)
Describe your research interests.  If you wrote a paper or gave any talks about your research, mention it.  Good communication skills are essential in research.
Describe how your research interests fit with the professor's own interests (which you're familiar with from their papers).
Reaffirm your interest in their work and show off your preparation by asking a question about one of their recent papers.


This is obviously time consuming, but it will greatly increase your chances of getting in.  Most professors will be impressed by your interest and level of preparation.  (I say "most" because there is one professor in my department who complains bitterly about getting emails from prospective students.  You may encounter one of these, if you're unlucky, but the good news is that you wouldn't want to work with them anyway.)  Use your institutional email address to minimize the chance of getting caught in spam filters.

One other point: in Canada, at least, many STEM fields have two kinds of master's degrees:


A terminal or coursework master's, which you get by taking a certain number of courses (8 in my department).  You cannot enter a PhD program with this degree (hence terminal) and you usually don't get any funding.  They can be often be completed in a year or sixteen months.
A non-terminal or thesis master's.  These are intended to prepare you for a PhD, so you get the degree by taking a smaller number of courses (4 in my department) and writing a thesis.  These are usually fully funded and take two years to complete.


Now, let me (finally) get to your actual questions.


How helpful is Canadian citizenship?  Somewhat helpful if you're applying for a non-terminal degree.  I mentioned that these are usually funded, which means you get a stipend to cover your tuition and living expenses.  However, the tuition you pay depends on your citizenship.  Canadian universities are subsidized by the government, so citizens (taxpayers) are charged less than non-citizens.  This in turn means that international students need a bigger stipend to cover their higher tuition.  All else being equal, a professor will choose a cheaper citizen over an expensive international student.  Being a citizen will also make it slightly easier to win scholarships, since many require citizenship or permanent residence.
How important are grades? Most programs require a minimum undergraduate average of 78%/B+, so you're definitely borderline.  Stay above the minimum if at all possible, and if there is an explanation for your grades (e.g. illness), include it in your application.  If you did better in later years or courses that are core to your degree, mention that.  Nobody cares if you failed underwater basket weaving, but if you failed calculus, you're in trouble.  Finally, make contact with the professors you want to work with; if they want to accept you, grades will be much less of an issue.
How important are GRE scores? Practically irrelevant.  Students with a non-Canadian bachelor's are sometimes (not always) asked to submit scores for the general test, but as far as I know no program asks for scores on the subject tests.  
How helpful is research experience? All honours undergraduate programs in Canada require a thesis or a capstone project in the final year, so this isn't special.  Fewer students do summer research, so that will help your application.  The main issue is that "research experience" is a fairly meaningless term, so when you write your application letter, be as specific as possible about what you did and learned.  "I have research experience" is not nearly as powerful as "I learned the standard technique for measuring XXX and applied it to a project exploring effect YYY.  I then presented the results at conference ZZZ."


Final disclaimer: I'm in computer science at Waterloo.  As far as I know, everything I said is true for physics departments and other universities, but I can't guarantee it.