Advice, tips, and suggestions for a first time buyer...

First start with the room. Is this a dedicated area or multipurpose room? Either way if you are new to this a good set up with good speakers will sound much better than a bad set up and fantastic speakers. Start here.
http://shop.avscience.com/Pro-Theater-Layout_p_44.html

Getting a good layout will not only help with proper placement of seating, speakers and acoustic treatments it will help you determine what equipment will be best for your situation. You have to narrow down your criteria before people can give good suggestions. You often get suggestions on peoples' experiences but their situation might be different than yours and their solution might not give the best performance in your space. Allocate some of your budget to acoustic treatments, this will have a bigger difference in sound than going to the next level of equipment without acoustic treatments.

Since you are in Canada, look into SVS subs, an Internet direct sub manufacturer who is considered to produce some of the best value subs. They have a retailer in Canada, which saves you international shipping. Subwoofer costs from traditional brick and mortar stores in Canada are horrible compared to prices here in the US, and SVS subs are still a better buy even here.

Here are reviews of the two models I would look at:

SVS SB12-NSD: http://www.audioholics.com/reviews/speakers/subwoofers/sb12-nsd-subwoofer
SVS PB12-NSD: http://www.audioholics.com/reviews/speakers/subwoofers/pb12-nsd

I am not an expert, but here are a few tips.
First, re: the budget. $3,500 is a good amount, but if that is a hard cap that you absolutely cannot exceed, consider earmarking about $4-500 for misc stuff, like cables, interconnects, power conditioners, speaker stands, etc. Otherwise, you might end up exceeding the budget.
It is also important to decide tower vs. bookshelf sized speakers for the mains. You mentioned wanting towers, which is fine, but don’t rule out bookshelves. If you really plan to listen to a lot of 2 channel music, then I agree, get towers. If the main use is going to be TV/movies, maybe not. You will definitely be getting a sub, so the low bass extension in towers is not so important. They also have better dynamics and can fill a larger room with sound, but your room is not so big and you will be sitting pretty close, about 8 feet, so you may not need that extra power. Since towers are usually quite a bit more money than bookshelves, you may want to keep that option open and get a higher quality set of bookshelves.
I agree, rear ported may not work great in your setup.
I agree with the above post, SVS subs are great and they really stand behind their product. A good sub is a must for home theater enjoyment. It looks like your room is only 15x10 feet by 7 feet high, so that is a small room by subwoofer standards. I bet the SB12-NSD would do great there. If you call SVS, or their Canadian dealer, they can help you pick the right sub.

As far as receivers, I believe the general consensus is that most modern AVRs can drive most consumer speakers to decent levels unless you either have a huge room or listen at really loud levels. It is really the features and connectivity that separate them. Most people seem to think that getting the best room correction software really helps. The main brands are Denon/Marantz (owned by the same group), Yamaha, Pioneer, and Onkyo. IMO, I would avoid Onkyo. They do tend to be less expensive and featured packed, but there have been quality issues lately and they use the lowest form of Audyssey room correction software(2EQ). Yamaha and Pioneer are both good, but use their own proprietary software (YPAO and MACC respectively). Denon seems to be the way to go, IMO. They are Airplay ready if you use IPad/Phone, and they use the better MultEQ XT version of Audyssey.

2 possible systems:
Both use Denon 1713 ($450) and SVS SB-12-NSD ($650) = $1100
Aperion Intimus 5T towers, 5C center, 4BP surrounds = $1400
Total = $2500
You could even get a 2nd SB12-NSD and have really awesome bass, total $3150
Or:
PSB Image T5 towers, C5 center, S5 surrounds=$2300
Total=$3400

Now, just as an example, look at Aperion Versus Grand bookshelves, Versus grand center, and Versus surrounds…total = $1900….Much better components than the Intimus line, if you decide to go bookshelves. Add that to the AVR and sub, total=$3000. (One caveat, the Versus Grand bookshelves are rear ported. They may still work, but I would discuss with Aperion before deciding, once you measure how much room they will have to breathe). Anyway, you can at least see how going to bookshelves allows you to "step up" to a better line of speakers. You could even switch the Image T5 towers for the Imagine B bookshelves, as another example.

Good luck

^^

Yep. In a room that size, two SVS SB12s would produce some pretty awesome bass!

In addition to those speaker models, look to see if you have any Paradigm sellers near you. They are a Canadian-based company like PSB with a similarly good reputation.

And I agree with NewHTbuyer about bookshelves. Since you are in a small room and will be setting up the TV and speakers along the shorter wall, bookshelves can do a good job for HT usage.

Oh, I mentioned extra budget for power conditioners/surge protectors. I have two of these for my two setups and have been pretty happy.

http://www.amazon.com/APC-H10BLK-1kVA-Power-Conditioner/dp/B000FBLOAY

It seems to be a bit less expensive than comparable units from Monster, Furman, or Panamax and Audioholics actually reviewed it and gave it a thumbs up. Plus, it has a ten foot power cord, so you don't need to worry about using an extension cord, which you are not supposed to do with these things. I have really bad voltage irregularities where I live, so it is nice to have quality protection.

IF you decide to go bookshelf and IF you can have rear ported speakers, considering your layout...I would consider these:
Ascend acoustics CMT-340 600 dollars shipped
Ascend acoustics CMT-340 C 325 shipped
I would spend a couple hundred dollars on decent surrounds that fit your space/payout and you got a 5.0 for just over 1100 dollars- then, as suggested, get 1 or even 2 12 inch subs ~500 each
A little under your budget and while you can certainly get better speakers for 3500...but not much better!
The Ascend Acoustics CMt340 are the best speaker I have ever heard that didn't cost some thousand of dollars...very balanced- not to warm, not too bright and capable of play well soft or loud!

Elihawk,

I have not heard Ascends myself, so I have a question. Why not the Sierra1 center and bookshelves? They would still fit his budget. What is the main difference between the Sierra line and the CMTs? Are the CMTs better for home theater?

Thanks

Here's what Dave Fabrikant posted that might help with this.....

http://www.avsforum.com/t/849859/the-official-ascend-acoustics-sierra-thread/2610#post_22459269

I simple recommend the CMT-340 becuase those are the model speaker I have listened to extensively. While it might be very logical to assume the Sierra-1 would be equally as good or likely better, I just cannot comment on that.
However, looks like Curtis has provided some comments as to a comparison between the two speakers....

Cool, thanks for the info. Maybe for the OPs purposes, the CMTs would be a better choice, leaving more cash for subs etc.

2-3 feet is fine for the rear ports on the speakers. More than enough.

Sometimes hi-fi shop people are a pleasure to talk to. Sometimes they ignore if you aren't interested in their top tier products.

Big thing is be careful and verify what claims they make. Some shops will push high end audio cables at you that do very little if anything at all. They may tell you to put more into the electronics to try to get you to buy more, when the return on that is typically much less than what you get out of putting your budget to speakers.

And don't get talked into buying a sub. It's very, very rare that any brick and mortar stores will beat out the quality of the SVS subs for the price. What they may try to do is get you to buy a speaker set at full MSRP and throw in the sub at discount. The trick is to get them to give you the discount without the sub.