I would like to include still images of print ads from newspapers in my short film. (eg: Volkswagen Beetle: Drivers Wanted) Would I be allowed to do without any kind of written permission? Also, would I be able to manipulate those images? (nothing negative)

Assuming Canadian law is the same as US, no, you can't do either without permission, except in very, very limited circumstances.

If I'm not allowed to use existing ads, would I be able to parody an advertisement using pictures of the car I took myself?

You can *DO* whatever you want. Whether or not you get sued over it is a whole different matter. :)

Please give some more background about your short film. Where will it be shown, to whom, and why?

On a somewhat related note, here is an interesting piece on visual/collage artist Robert Raushenberg, who was successfully sued for using a print ad in one of his works:

http://www.benedict.com/Visual/Rauschenberg/Rauschenberg.aspx

How would this be any more illegal than doing a news segment showing a closeup on a poster? (eg: Mamma Mia is in town and you should go an see it!) And what about sketch comedy shows that do parodies, why is it they don't get in trouble?

I'm just trying to understand the fuzzy logic that governs copyright law.

There is an exception to copyright for legitimate news coverage. Parody is a fair use exception to infringement.