My interpritation only (Seek legal advise and do not take my word for any of this - or read it yourself I supplied a link below and come to your own conclusions) - Also I am short on time so I am typing this very fast so if anything is wrong I am sure the other members here who have been curious enough to read the law can fill in the gaps.
1) What is legal and illegal for girls
Section 212 of the criminal code of Canada (Here is the link
http://laws.justice.gc.ca/en/C-46/section-212.html) -
ANYONE CAN READ THIS IT'S NOT OVER THE TOP - VERY EASY READ FOR EVERYONE!
In Canada prostitution is LEGAL but solicitating it is not (at least not in public). Common Bawdy house is illegal (AKA Whore House or Brothel) so run-N-tugs who offer FS and incalls are illegal (but are rarely bothered unless drugs, violence or disturbances are involved - or sometimes politians like to stir the pot). Pimping (living off the avails) is illegal as well and underage escorting for anyone under 18 years of age.
2) what is legal and illegal for guys
Don't solicit sex in public (Street Walkers) and don't get caught in a common bawdy house (especially with your pants down!)
3) what is legal and illegal for drivers
Living off the avails, if your making money off the girls prostitution you could be charged but chances are if you are not the actual pimp you will not be in much trouble unless you were doing the pimps bidding too or involved in drugs.
4) what is legal and illegal for owners of angency
Same... pimping (living off the avails). If the agency is run professionally and not "PIMP LIKE" they would be in the grey area of the law. If the agency is telling the girls when they must work, forcing them to work in any way or feeding them drugs (any common pimp activity) they are in the red and could be under a lot of heat.
5) how advertising can be legal or illegal
It's legal. The criminal court of Canada past a discision that allows the ladies to advertise in newspapers, online, etc... and be as discriptive as the individule media will allow. Some newspapers restrict sexually explicit ads for offensive reasons others like eye and now magazine don't really have many restrictions.
6) why you hear police bust on escorts agency, girls and guys ;
Usually street girls, massage spa's offering FS, a brothel where a neighbour complained or it was run by a pimp.
7) what are the legal recourse for girls, guys, driver and owner of agency
If they are truely pimping the girls they could go to jail and all sorts of nasty stuff. Girls will usually get off if they agree to testify against the pimp, a good lawer would help but would cost you big bucks... bottom line don't pimp the girls!! If you do your just another asshole.

what protection do agency provide for these girls?
Legit agencies often screen calls with caller ID, call back the number and have the girl call in for a "Check IN" when they arrive and feel safe. If they fail to check in the agency will call both the girls cell and the number the call was booked on (and often the driver as well) then if they can not reach the girl the police are called. Some drivers will go knock on the door but it's best if the police are brought in. Since outcall escorting / prositution is legal the police can be brought in and check for fowl play!
If it legal why do you hear raids/sweep in the newspaper?
Is it election time? If not then it's probably organized crime with high risk fs massage spa's (Lately it's asian and european women being lured here to Canada to work in FS massage parlours and being forced to work here - some scary shit goes on with some) out in BC they have a huge court case for a asian forced prostitution ring run by a female asian pimp but they suspect it goes much higher then her...
If your planning to be the next pimp, think twice! All it takes is one of the girls to realize your a asshole and your in jail getting pimped yourself. If your planning to open a agency you need to do MUCH more homework!!