I'm not sure I quite agree.

While the back seat of the S3 is small, I personally believe the IS350 is much smaller.

Is Audi maintenance cost really expensive?

is350

IMHO, reliability and RWD trumps all

Since Lexus Canada decided not to bring any IS350 RWD in, my vote goes to the S3.

IS350 AWD sounds like a contender but with the lack of the sweet 8speed direct shift automatic and the added weight of the AWD system, it makes the car feel "slow" at today's 50K+ price point.

Not considering any other cars?

There's a lot of great responses in this thread. In reality OP, do you really want to buy a car that a bunch of people on the internet said was great? Drive both. See how both of them feel to you and buy the one that feels the best out of the two.

Go for S3, love this car, fun to drive, wonderful exterior, upscale interior that looks and feel expensive, precise handling that make it wonderful drive on twisty road. Maintain it properly and it will give you more fun...

Toyota whore here. IS350 for the reliability, and future family expansion. If I get a sedan it's gonna be a comfy cruiser with some balls and I expect it to be somewhat boaty; if it's gonna be a cramped car for fun, it's gonna be a 2 door.