Sux OP.. but it's not the first 3.7l engine to go boom in Canada.
Sounds like you have a good rapport with the Service Manager, which is Key in this situation. You should have no problems with warranty, because the Dealership will bill Nissan Canada, full-pop for labor to replace the motor.
-I went through 2 Rev-up, motors with warranty replacement.. that's how I know..
If you can take a positive from this situation.. If you have plans to go FI, you can ask them to install a new clutch+flywheel for you, at no charge.. since the motor is already out, they won't care!
-Again, I know this through experience.
GL!