Hi Brad,
Canvas is indeed free and open source. Anyone may create a free course and use it for as long as they like, free of charge, or download the software and run it on their own servers. What people do pay for are administrative control/access of an entire instance, support and training, and sometimes integration support. So, if a teacher wants to manually create courses they can do that easily enough but if a college wanted to create an integration with their student information system and a course shell and enrollments for every course in their SIS they would likely become a Canvas customer.
Would you like to be contacted by someone from our company to discuss more specifics?