Typical Canadian slang talking about joking around. Can be used in many situations but exceptionally well used in winter where you can pull the toque down over their eyes making the metaphorical "pulling the wool over their eyes" more literal.
"Hey man did you REALLY do that?"
"No way man, I'm just tugging your toque."
12 step recovery jargon referring to someone new who talks about how great life is, now that they'resober. Usually meaning that the person is out of touch with reality.
The new guy seems pretty happy for a dude who has no job, no money and no family. He must be on a pink cloud.