I'm assuming that title laws in Canada are similar to those in the U.S.
When we sold our car last year, we still owed $10,000. The woman who bought the car from us bought it for $12,000 and paid with a cashier's check. We sent the payoff amount in and request they overnight the title to us. We then met the woman at the title office and signed it over to her.
Type up a sales contract - or you can even download some generic sales contracts, get it notarized to prove that you paid for the car.
I found this site, hopefully this helps.
http://www.mto.gov.on.ca/english/dandv/vehicle/used.htm