You should get this all sorted one part at a time, it can be difficult to work with more than one objective at once.
You should start with your tax rules. The first rule you will have will check if the user has selected Canada and the shipping country. The value that the user enters into the checkout form is stored in this session variable:
$_SESSION["eCartCheckoutForm_shipping_country"]
You will need to setup a new tax rule, the first thing you need to do in this rule is check that this session variable exists, then you need to check to see if it is set to CA. You can reference the session variable by name, eCartCheckoutForm_shipping_country.
For the calculation you will choose subtotal for the entire cart 'times' 0.05 for 5%. The next rule for ON customers will be very similar, but you will check the eCartCheckoutForm_shipping_state_province session variable and make sure it is set to ON. Then just configure the amount just like the first one but use 0.08 instead.
With both rules setup a Canadian customer would see the regular 5% tax. If the customer also chose ON as the province then they would see an additional 8% tax.
You can disable shipping rules with eCart, or you can just make sure not to check the box to enable shipping in the settings tab in the admin area. You can get the shipping and tax information on the cart page but you will first need to gather the user's location information. This is why it is done when checking out by default. The user gets a chance to see the order details and amounts on the confirm page before the order is processed.
