[ontario, Canada] Hyundai Refusing To Honour Safety Recall Engine Replacement, Claiming Recall Is "completed." Worth Pursuing In Small Claims?

Location: Ontario, Canada

Background: There's a Transport Canada safety recall (2021-252 / Hyundai R0189) for Elantras with the 2.0L Nu engine, defective piston rings that wear and damage the engine. The recall's corrective action is to inspect the engine and replace it if necessary, and it included a noise-detection software update. My car received the inspection (2022) and the software update (2023), documented, but no actual repair was ever done.

Three years later I got a flashing engine light. Towed it to an independent mechanic; his scan showed an active P1327 code (piston noise detection), which is exactly what that recall's software is designed to flag when the engine is failing. Car is in limp mode.

I took it to the Hyundai dealer. They said I'd have to pay up to ~$700 out of pocket (diagnostic, possible engine teardown, possible knock sensor replacement) to proceed, and confirmed I would NOT get that back even if the failure is confirmed recall-related. I declined and opened a case with Hyundai Canada, asking them to confirm in writing that these fees are per their instructions. They replied only that their system shows my recall as "completed", but that refers to the earlier inspection and software update, not any engine repair, and therefore I'm not eligible under the recall.

I have: the written refusal, the Transport Canada recall record, the P1327 diagnostic, my full dealer service history showing no repair was ever performed, and my oil-change records. I'm preparing a formal demand letter stating that if they don't order the dealership to perform the engine replacement at no charge, I'll pursue Small Claims.

Questions:

1. In Ontario, is Small Claims the right venue for this?
2. Is my argument sound, that the recall isn't actually "completed" because only an inspection and software update were done, no repair, and the defect has now manifested?
3. Realistically, how likely is this to succeed, and roughly how long would it take?
4. Anything I can do about being without a vehicle during the process?