OK just got my answer. Changed the language to english and it appears! I don't recall reading that it was an english only feature!!!?! I am not very happy customer, this was one of the reasons I bought an "new" iPad.
EDIT: I have switched back to french and now "Dictée" appears...that is odd. Now it works great.
So this is a trick for languages other than English: Switch to English, enable Dictation and then switch back to your language.
EDIT 2: just found that the french keyboard has the microphone for dictations, it is the French Canadian that does not have it...