How do I go about doing this? I see that I can do it on MtGox but how do I end up getting the real CAD currency in hand or in a bank?
Sometimes a transaction like this is for speculation -- to hold Canadian currency to speculate on the future exchange rate. If that is the case, then usually the amount being sought is a larger amount. Other times, this type of trade is related to travel or for gifts -- where one looks to procure CADs now to have for some future event. In that instance, the amount is generally not a larger amount.
If the purchase amount you are looking for is not a large amount, then what you might do is try to find an individual trader from Canada who will send cash in the mail.
The #bitcoin-cad IRC channel is one such place you might find someone trusted who will do this.
LocalBitcoins.com is another -- simply search for a canadian location, like Toronto for instance:
Another method is to find someone locally who does USD/CAD exchange. Some banks might offer this, or there may be an exchange that caters to travelers which does this (e.g., Travelex). Then simply cash out your bitcoins to USDs and do the trade that way.
You listed "in a bank" as one method of receiving your CADs, rather than exclusively getting physical currency. This might be because you were taking advantage of arbitrage opportunities that existed where profits of several percentage points were available by simply buying bitcoins with USDs and then turning around and selling them for CADs. Other times the reverse trade is profitable. Right now these two markets are efficient meaning there is nearly no profit from arbitrage possible.
For that purpose though, and for other various uses, a bank in the U.S. with a foreign currency savings account might work for you. HSBC, for instance, offers this which they target for use by expatriates. There are high minimum balances though (like $25K US).