"...ALL ARMOR PIERCING ROUNDS OR AMMO ARE ILLEGAL..." Whoever told you that is confused.
"...you do not need Ap in a rifle because it has the penetration..." AP, in a rifle, is for penetrating light armour plate and modern military body armour.
Not all rifle bullets are made to penetrate either. Varmint bullets, for example, are made to expand rapidly upon impact with little penetration. It's why they're no good for deer hunting in cartridges like the .243, et al. Bullets designed for larger game are made to expand after penetrating.
Some handgun bullets are made to penetrate too. Bullets used, Stateside, for hunting with a handgun are made to penetrate according to the cartidge and game being hunted. None of 'em are AP though.
"...FN Herstal has informed us..." That FN's company policy. It has nothing to do with Canadian law. FN doesn't want to bother with the civilian market. Large government orders only.