It would be great if there was a canvas option to make the image square by increasing the canvas size. Whichever dimension is largest, increase the other dimension to that size (along with current alignment and offset options). This way a 400x500 image becomes 500x500, and a 345x230 image becomes 345x345.
Square canvas option
Summary:
Add canvas to an image so that it is square. A 400x500 image becomes 500x500, and a 345x230 image becomes 345x345.