What is a folk song? I think the answer is obvious... Folk songs are the not necessarily the songs sung by professional musicians, although that is often how we will hear them nowadays. Folk songs are the songs about here and now, real people, real events, real places.
Frances Heylar, from my home town, Saint John, writes songs about our history and about current events - I learn something everytime I listen to her sing (but that's not why I listen - I just really like what she has to say)
People like Frances Helyar, Stompin' Tom and Stevedore Steve perform/write songs that are catchy and entertaining and not necessarily commerical. People listen and hum along and the word spreads. (Everyone around here knows the words to 'Bud the Spud'!) This of how other 'traditional' or 'folk' songs started - hundreds of years ago, they were the popular songs of the day - everybody knew them and many of them were written by people who weren't musicians by profession.
Those are my thoughts...