The bottom line is, no, you cannot. The car may or may not be in the US illegally to begin with; certainly VW would have something to say about it if they were made aware of it, which they definitely would be if you tried to return it in the US. Your insurance situation is also probably tenuous at best.
You should return the car in Canada and then if you intend to continue residing in the US (which is what you are doing; it sounds like you are only spending a minimal amount of days each month in Canada, and the US considers you to be a resident if you spend only about half the year here, let alone nearly all of it) then get a US-based car and US insurance.
Assuming you don't get deported.