I remember Ontario insurance rates.. they start at steep and move rapidly to crippling for a young guy. It's not much better here, we're required to have provincial insurance in addition to any coverage you want from another company.
From the way it looks, you're going to be able to have fun with some bureaucrats if you want to. Start with making calls to the MTO office to find out how you would register your after-market conversion bike as a platable vehicle. (What info do they need?). Going back and forth with them and insisting that as a law-abiding citizen you want to do this the right way should lead one or two of them to having to take some stress days off.
From there you'll be able to find out what category they consider it to be and then be able to track down a (hopefully) good insurance rate. If you can get added on to the family vehicle policy it should save a few per cent.
So far I haven't had any problems out here. The few times I have passed by police I've always cut the throttle down and buzzed by at idle speed. I smile and wave, they smile and wave back. I wait until I'm a bit farther away before I open it up again too. There's no need for them to know what it's actually capable of.