My drafting business is mostly 1099 (4 clients), I'm a sole proprietor but I do have one w-2 client, not a large operation.  

In your opinion, does one attempt to begin as a sole-proprietor, so to speak, until enough equity and assets are built to then transfer and operate under an LLC?

My cousin is a sole-proprietor in an LLC that owns a multifamily property in Los Angeles, California.

while leaving it in your name it would be more difficult.That would be a discussion to have with your accountant, but in these cases the CRA typically does not distinguish between the proprietor and the business.

Your choices are 'sole proprietor', provincially registered company, federally registered company all of which can have almost whatever ownership structure you want.

If you don't have an LLC you are running as a sole proprietor. 

Akin to insurance, paying for the benefit seems worthless when you aren't using it, but get caught without it and you'll wish you trimmed your cable package instead of conducting business as a sole proprietor. 

Do I need to be incorporated to start or can I start as a sole proprietor?

In your case it sounds like you're wanting to form a single member LLC (you and your husband or actually your joint return as the tax payer) that will be taxed as a sole proprietor. 

I assume a sole-proprietor LLC won't really protect you from any of this.