By law, they have to exchange both the game and the console. Electronic devices cannot be guranteed 100% of the time sinse they are factory manufactured.
You may have to make a stink depending on what store you purchased it at, but they cannot deny you an exchange if they sold you a defective product. They are obligated to honour an exchange if the product was defective right out of the box. They can deny you a refund, but they can't deny an exchange. You also don't have to purchase a "return guarantee" unless it's an extended warantee of some kind.
What store did you buy it from by the way? I too am from Canada.
chefstubbies
Maybe I should have explained it a little better. The Halo 3 disk wasn't defective, it was destroyed BY the console (nobody told me you couldn't move the 360 from vertical to horizontal while playing :( ) And I bought it from EB Games.
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