spousal residency

The American cannot just "move" to Canada. Without status, all the American can do is visit.

That said, in your situation, particularly if you have employment in Canada and contingent on the American not having any admissibility issues (criminal record sort of thing), as long as you are accompanying the American to Canada and you are upfront about plans (American just visiting, staying pending outcome of sponsored PR application), usually (no guarantees) there is no problem.

Probably too much of a hassle to seek status to live in Canada in any other way than the sponsored PR application. Possible, but probably not worth it (there are exceptions for some types of skilled workers who can relatively easily obtain temporary work status if they have a qualified employer in Canada).

You can submit the sponsored PR application while still living in the States, but must include some evidence of your plan to live in Canada (letter from employer regarding transfer should suffice for this).

Do not be put off by the CIC reported timelines for processing applications through Buffalo: just be sure to do a thorough, well-done application including all required documents, and given years of living together in a marital relationship the application should go through as quickly as they can . . . the reported timeline is for 80 % of applications, obviously (but for, again, issues like problems with admissibility), what would be far more relevant to a case like this is how quickly the fastest 35% are processed . . . which they do not report and which should be less than six or seven months (not even sure it is that long).

In the meantime, the American can come to Canada with you, again as a visitor, and stay in Canada pending the outcome (usually, no guarantees, but in this situation the border officers often issue Visitor Records good for up to a full year stay, and those ordinarily can be extended if need be, but ordinarily that would be more than long enough).

By the way, regarding processing time:

In another thread, PMM alerted us to another resource (the Canadian government open data pilot project), for information about the processing timelines.

It confirms what I said above about the processing timeline, and indeed, the site confirms that in the last 12 months reported at the Open Data site, that indeed 50% of applications were processed in 6 months in Buffalo. That's the number most relevant to anyone who does a thorough and well-done application and does not have issues, not the 11 months it is reported for 80% of applications.