The humiliation inflicted on an opponent who cheats, conducts espionage, carries out sabotage, engages in blackmail, publicly smack talks, and otherwise exhibits dishonorable behaviors when defeating them honorably and treating them with respect throughout.
The term was coined by Archer en Tilavine, Founder and Executor of the Lotek of New Eden alliance, to describe their honorable victory in their war against the proudly-dishonorable Kakistocracy Mercenary Alliance, which disbanded shortly thereafter, in the game EVE Online. "Canadian" refers to how nice Canadians are; nice enough that they would, as the jokes go, say "thank you" or "you're welcome" when they are slapped in the face.
"We defeated Kakistrocracy Mercenary Alliance even though they placed spies in our alliance, they employed neutral third parties to help them on the battlefield, and they taunted us repeatedly in public. Throughout the war we never infiltrated them, we never employed neutral third parties to assist, and we never spoke disrespectfully to or about them to others. We defeated them with a classic Canadian Bitch Slap!" - Archer en Tilavine