Here is what Passport Canada says about replacing lost passports:
Lost, stolen, damaged, destroyed or inaccessible passport
A Canadian passport is a valuable document that should be kept in a safe place at all times. Once a passport has been reported lost or stolen, it is no longer valid and is not to be used for any travel. This is to ensure that it is not used for fraudulent purposes. Passport Canada, Canada or any representative of the Canadian Government cannot be held responsible for any difficulties at border crossings if you attempt to use a passport that has been reported lost or stolen.
Reporting the loss or theft of a passport
As soon as a passport is believed to be lost or stolen, the bearer is required to report the circumstances of the loss or theft to:
the local police, and
Passport Canada.
Damaged passport
If a passport is damaged in any way, there could be significant delays at border crossings of other countries. To avoid such incidents, Passport Canada recommends that anyone with a damaged passport apply for a new one.
Reporting a found passport
A found passport should be reported immediately to the police and to Passport Canada and returned to Passport Canada.
If an individual finds his or her passport, which had previously been reported lost, he or she must immediately advise Passport Canada or the nearest Canadian Government office abroad, and return the found passport.
Replacing a lost, stolen, damaged, destroyed or inaccessible passport
The request for a replacement passport can be made in Canada at any Passport Canada Office or at the nearest Canadian Government office abroad. However, before the document can be replaced, Canadian authorities will conduct an investigation into the circumstances. This may lead to delays in processing the replacement passport.
A replacement passport (which may be valid for a limited period only) may be authorized, provided strict requirements are met. These include the submission of:
a completed application form,
two identical current passport photos,
the appropriate fee,
documentary proof of Canadian citizenship, and
a "Statutory Declaration concerning a lost, stolen, damaged, destroyed or inaccessible Canadian passport" (PPTC 203) if the passport is still valid.
