Well, I think that most Canadians that you might ask would define a mukluk as something like a moccasin, but built like a boot...it goes higher up the leg, and is obviously warmer, is made of leather, has fur on it, sometimes tassels, and is worn in the wintertime. Then I checked my Oxford Dictionary of Canadian English (I don't know the cute abbreviation for this) and it agrees with me (of course, it's at home, I'm at school, so I can't give the word-for-word definition). Also my husband had the same definition for it, when I asked him.
People actually wear these things, not just up north, but in the big cities - though not often, and generally for cultural events (such as the Festival du Voyageur, a Francophone festival which takes place in Winnipeg every February)! My mother even had a pair stashed in the basement, which I never was anyone wear because there was a hole in one of them.
