Yakk -
Indeed, they sound similar, but the money in an American "traditional" (non-roth) IRA is pre-tax dollars, so money that has not been taxed yet. If you prematurely take out the money here, you are not only taxed on the dollars you take out, but you also are required to pay a penalty ( I believe 20%) to do so. However, there are certain "qualifying" reasons to withdraw the money prematurely and not pay taxes or get penalized. Buying your first home, medical expenses, ect are included in those "qualifying" reasons.
Since you're Canadian though, you probably don't need to worry about the medical expenses
