So I have been using Wind Mobile, and it has been working pretty well for me. I have a "$40/month, unlimited everything (voice, data, text, long distance, etc.)". That was a one time special, but they might have something similar again.
Right now it looks like they offer an 'unlimited everything' plan for $29/month, but only for up to a year, and this does not include long distance.
http://www2.windmobile.ca/en/Pages/voice-plans.aspx
Anyways, the WindTab option looks fairly similar to the 'free phones with 3 year contract' options. Wind will front you the cost of the phone (up to about $400 it looks like), and 10% of your monthly bill pays down the tab balance. If you stay with them for 3 years, then they clear your tab. If you decide to leave before 3 years, then you owe the difference. Sounds similar to canceling a contract, but I would guess the cost to you would be much less.
What this means is you could get a Google Nexus S (reg $495) on the WindTab for $99, if you stay with Wind for 3 years. If you leave early, you'll have some of that phone paid off, but will be on the hook for the remainder of your tab.
It should be noted that Wind (and from what I understand, Mobilicity) are only good options if you expect to use the phone within their Wind Zones (i.e. Calgary, and some other major Canadian cities). If you want to use the phone outside of this area, you will be paying $0.25/minute, and LOTS for data usage.