Resistance bands are great--they offer an easy-storage, low-cost option for your home gym. I have 3 of them ranging in resistance and they've been beneficial.
I greatly prefer dumbbells because I'm working harder throughout the motion...with resistance bands, there's a definite slack on the eccentric part of the move. Also, a pair of dumbbells in hand makes it more difficult to balance..which means I'm working harder to keep my balance..which means I'm working my core and all of those lovely little stabilizer muscles in legs. That's a good thing.
I started off with a set of 3, 5 and 8 lb dumbbells and I've since added on so that now I have everything ranging from 3-25 lbs.
The weight you "need" depends on how strong you are now, what type of workouts you'll be doing with them, and what types of exercises you'll be doing in the workouts. If you're planning to do low-weight with high reps done at a fast pace (aerobic weight training) the 3-5-8 lb weight range should be sufficient. If you want to do slow and controlled lifting, then you'll need a larger range of weights. Also, different exercises use different muscles..you can lift heavier with chest and back muscles than you can arm and shoulder muscles.
Yes, weights are expensive, but there are a ton of options out there (admittedly, I don't know what you'll have available to you in Canada!). I bought my initial 3-5-8lb set new...the rest I bought used at prices ranging from 25-50 cents per pound (which is over half off what you would pay retail..at least in the states). Check out used sporting goods stores (we have Play it Again Sports here..love it!), Craigslist, Freecycle, garage and rummage sales, thriftstores. I found my 25s at Value Village for $10. You would be surprised at what you can find for a reasonable price.
Again, I didn't get all of my weights at once, so it was easier to manage. Even if you aren't able to get weights heavy enough to work your chest and back, do push-ups. Actually, do push-ups anyway...they're great!
Of course, a lot depends on how much space you have. Unless you have adjustable weights (like the Selecttechs), dumbbells take up a lot of room
Whatever route you choose, good luck!