doubt this is true. there is no AT&T in the UK, where the 1st gen iPhone was also released. does that mean there is no warranty in the UK?
The warranty for iPhones in the UK quite likely has different terms and conditions than the warranty for iPhones sold in the USA. For example, if someguy7014's supposition is correct then in the UK warranty service might be contingent on being connected to an active O2 account.
In general though, a cell phone's warranty is only honored in the country in which it was originally sold, and the fact of the matter is that the 2G iPhone was never sold through any authorized retail channels in Canada at all.
The iPhone came with a 1-year warranty, so it is very possible that you're out of warranty already.
Apple does have a US$79 out-of-warranty battery replacement program, but if you try to use that program, you won't actually get the same iPhone back as you send in - they'll replace it with a different equivalent refurbished unit. If they discover that the phone you're sending in has been tampered with or damaged in any way other than the battery's diminished ability to hold a charge, it is ineligible for the battery replacement program.
Out-of-warranty service for any other repairable defects is available for a flat rate of US$199 for original 4GB and 8GB iPhones, and US$249 for original 16GB iPhones. Again, you won't actually get the same phone back as you send in for service under this program, and your phone must be in a good enough condition that after repairs it can be refurbished to a satisfactory condition for resale. If the phone has experienced any form of unrepairable damage such as water exposure, it will be ineligible even for out-of-warranty service.