Translation:It always snows during the winter in Canada.
*Tiu ne estas vera cxi tiu jaro I believe this is correct. Someone else can correct me if I have failed.
It would be 'tio' because it's a noun. 'tiu' is the 'that' of 'that one'. It goes with 'kiu' (which). One would not ask “kiu estas..” unless there is a set selection of things to choose from, just like one would not ask “which one is...” in English without a set selection to choose from. Likewise one would only use 'tiu' if there is a set selection, as it can be thought of as an answer to 'kiu'. Personally I think it would be easier to remember if we didn't use 'that' for both in English (perhaps we should use 'thich' to answer 'which'... Or maybe not)
Is there a grammar reason for not acceptibg "it is snowing” vs ”it snows” in this case?
I'm guessing, but ĉiam-dum plus a verb seems to take the action out of the verb's tense and place it into a sort of abstract state. So ĉiam neĝas dum vintro as in this example becomes "it always snows during winter." Mi ĉiam kantos dum festoj. = "I will always sing during festivals" Sofia ĉiam ludis dum lecionoj = "Sophia always played during lessons" and so on. It seems that the implication is that this always happens, but is not necessarily the only thing that happens. There are sunny days during Canadian winters, I might only sing one or two songs at each festival, and Sophia might have played sometimes during each of her lessons, but not others.
I hope this is correct.
Dum means within or during, more than anything. Je is sort of like ~um in that it can take an otherwise difficult preposition. Je Dio! = "by God!" Je via sano! = "to your health" etc.
Perhaps you were thinking of ĉi or ĉe?
Ah, the stereotypes! And we Canadians all live in igloos and all use dogsleds too, di'ncha know. Everyone wears parkas or plaid lumberjack shirts and owns a pair of snowshoes too . . . NOT.
Snow depends entirely on where you are in Canada -- the Pacific northwest is mostly snow-free, and with climate change proceeding apace, the "snowline" moves further north every year. And the Arctic is melting fastest of all, so that polar bears are beginning to starve for lack of access to ice floes for hunting.
Where I am, on Vankuvera Insulo, it would be more accurate to say, "Cxiam pluvas en vintro." Cxi tie, cxiam pluvas en oktobro, novembro, decembro, januaro, februaro, marto, aprilo kaj junio. En majo, la vetero estas suficxe bone, aux bela, sed la pluvo venas denove in junio.