The advocacy group said there were issues with 45 out of 98 samples analysed.
One-third (33) were considered species substitution as the name on the menu or label did not match the type of fish sold (such as tilapia labelled as red snapper).
Samples were analyzed by TRU-ID, a commercial lab in Guelph, using DNA barcoding.
Scale of fraud
Seafood fraud and mislabelling were found in 14 of the 19 different types of fish targeted.
Samples were collected in July this year from Ottawa grocery stores, restaurants and sushi vendors.
The investigation focused on fish suspected to have high levels of mislabelling including cod, halibut, snapper, tuna, salmon and sole.
Escolar, which can cause gastrointestinal symptoms such as diarrhea, vomiting and nausea, was often found as a substitute for white tuna and butterfish.
"Seafood fraud cheats Canadian consumers and hurts local, honest fishers as well as chefs and seafood companies looking to purchase sustainable seafood,” said Josh Laughren, executive director of Oceana Canada.
“It causes health concerns and also masks global human rights abuses by creating a market for illegally caught fish.”
Restaurants had the highest rates of seafood fraud and mislabelling, with 68% of sushi vendor samples and 51% of non-sushi restaurant samples mislabelled.
Seafood fraud and mislabelling were found at 10 of 12 sushi vendors and 16 of 22 restaurants.
Call to action
Oceana Canada said an increasing amount of seafood is being shipped from overseas with estimates suggesting that up to 80% of what is consumed in the country may be imported.
Dr Sylvain Charlebois, professor in food distribution and policy at Dalhousie University, said: "Food fraud represents a $52bn problem worldwide and is allegedly worth more than the heroin trade and firearms trafficking combined."
Oceana Canada said there are more than 900 species from all over the world sold in the country.
The group called on the Canadian Food Inspection Agency to make combatting fraud a priority and ensure all seafood sold is safe, legally caught and honestly labelled.
Laughren said Canada does not have a system of documenting and tracing seafood from boat to plate.
“Canadian scientists pioneered the DNA barcoding technology used to identify seafood, yet we lag behind other nations and key trading partners, including those in the European Union, which have implemented robust and successful traceability standards.
“The US has also taken important first steps in regards to traceability which surpass Canadian regulations.”
Oceana Canada said it will be doing independent seafood testing in restaurants and grocery stores across the country to better understand the extent of the problem.