I am trying to draw a circle using mouse on the canvas using mouse events, but it does not draw anything:
tools.circle = function () {
var tool = this;
this.         
        
Well, this code snippet doesn't tell us much, but there are a couple of obvious errors in your code.
First, DOM Event object doesn't have _x and _y properties. but rather clientX and clientY or pageX and pageY.
To get relative mouse coordinates from the current event object, you would do something like:
element.onclick = function(e) {
    var x = e.pageX - this.offsetLeft;
    var y = e.pageY - this.offsetTop;
}
Next, canvas' 2d context doesn't have a method called circle, but you could write your own, maybe something like:
var ctx = canvas.context;
ctx.fillCircle = function(x, y, radius, fillColor) {
    this.fillStyle = fillColor;
    this.beginPath();
    this.moveTo(x, y);
    this.arc(x, y, radius, 0, Math.PI*2, false);
    this.fill();
}
Anyhow, here's a test html page to test this out: http://jsfiddle.net/ArtBIT/kneDX/
I hope this helps. Cheers