Can we file for mortgage interest deduction while filing US taxes for home owned in Canada. I lived in US all of 2009. My wife lived in Canada from May 2006 to August 2009. The property is Canada was jointly owned by us. We are both US citizens.

Yes, as long as the property qualifies as a second home for you, then you can deduct the mortgage interest payments. See schedule A, line 11 - "Home mortgage interest not reported to you on Form 1098."