See you are in Canada but in US:
It is illegal and a federal felony to swap any post 1990 car engine combo for use on the street. The engine you swap must have been available [imported to US in that car] to meet Federal Clean Air Act.Doesn't Canada have similar restrictions?
The way people get away with 2.0 liter turbos is that they are smaller [less polluting] at idle and cruise. A larger V8 [even a newer year one] still produces more exhaust volume at idle vs oem.
Many states have visual inspection of engine compartment and the car can be confiscated on the spot [removed from the street permanently until brought into compliance.
Obviously enforcement varies.
http://www.ec.gc.ca/transport/vfprojects.htmOn-Road Vehicle and Engine Emission Regulations under Part 7, Division 5 of the Canadian Environmental Protection Act, 1999. The Regulations align Canadian emission standards for a broad range of on-road vehicles and engines with those of the United States Environmental Protection Agency, which are generally recognized as the most stringent national standards in the world. The regulations apply to light-duty vehicles (e.g., passenger cars), light-duty trucks (e.g., vans, pickup trucks, sport utility vehicles), heavy-duty vehicles (e.g., trucks and buses), heavy-duty engines and motorcycles. The new standards will be phased in beginning on January 1, 2004 and will reduce the allowable emissions levels from new on-road vehicles by up to 95%.
http://www.ec.gc.ca/CEPARegist...1.cfm