I have looked at the Highway Traffic Act and the original poster could have been charged with three different sections of the HTA. The statement that removing the pedals reclassifies the ebike into an motor vehicle are false and I will explain why.
First of all, the ebiker without pedals should have been charged with HTA section 103.1 (1)
103.1 (1) Every power-assisted bicycle shall have the prescribed equipment and conform to the prescribed requirements and standards. 2009, c. 5, s. 35.
I cannot find the set fines for this section of the HTA and am not sure what 2009, c. 5, s. 35 means. .
Alternatively the ebiker without pedals should have been charged with ONTARIO REGULATION 369/09 made under the HIGHWAY TRAFFIC ACT if they thought the ebike was modified.
No modifications
6. A power-assisted bicycle must not be ridden on, driven or operated if it has been modified after its manufacture in any way that may result in increasing its power or its maximum speed beyond the limits set out in clause (d) of the definition of "power-assisted bicycle" in section 2 of the Motor Vehicle Safety Regulations made under the Motor Vehicle Safety Act (Canada).
or if they thought the ebike was unsafe, should have been charged under the same HTA regulation, the next section
Good working order
7. A power-assisted bicycle must not be ridden on, driven or operated unless it is in good working order.
Under schedule 52.2 the sets fines for section 6:
Power-assisted bicycle – speed or power modified is $85
and under schedule 52.2 the set fine for section 7:
Power-assisted bicycle not in good working order is $85
According to this Regulation 369/09 section 6 you can have the ebike modified to completely not conform with the definition of an ebike under the HTA, modifying it beyond legal power and/or speed and the maximum sanction is a fine of $85. In contrast to removing the pedals, these modifications are far more serious, yet do not reclassify the ebike into a motor vehicle, so saying any modification of an ebike reclassifies it is false. The intent of the legislation is clear.
An ebike without pedals is dealt with under the HTA in the above legislation.
The Compulsory Automobile Insurance Act was never written to be used to punish for ebikes with no pedals.