No, if that's what they're saying then they're lying to you, or horribly mistaken. You are not responsible for ANY of it (not even $50, that applies to unauthorized credit card transactions). If they are not willing to pay you back and are stalling, then tell them you will pursue the matter in small claims court, where they'll be liable for disbursements as well.
Cite the following source: Government of Canada's website
https://www.canada.ca/en/financial-cons ... ction.html
That should get the ball rolling.
The rationale for the chip-and-PIN is so that the institutions have better loss prevention for themselves, it's not meant to pass the responsibility on to the consumer. On https://www.canada.ca/en/financial-cons ... tions.html you can see this is specifically mentioned:
If you’ve met your card issuer’s requirements for liability you can’t automatically be held liable for an unauthorized transaction just because an authentication technology like chip-and-PIN was used to make the disputed transaction.