I disagree with Ryder on this. Life IS a struggle. When somebody pushes you, you hit them hard (with a baseball bat if possible). You really don't have any leverage in this scenario, so you have to make up for it with zeal. Sometimes the best thing to do is to back down; but generally the best policy is to attack and attack hard over and over again on as wide a front as possible to see if somebody turns tail and runs. Nobody likes having their day interupted by whiny, obnoxious, demanding people over and over and over again. Most of the time the other side doesn't care enough about their rules to fight you over a point and you can USUALLY do some sort of a deal, especially with a multi layer organization where you can shop for somebody with the answer you want and it is not really their money so at the end of the day they really don't care. Sheep placidly follow the rules. Everybody else breaks them down, runs over them, or ignores them whenever possible or convenient. Only honor a contract when it is in your long term best interests to do so (and yes sometimes you have to bite a bullet for your reputation) . In all other scenarios (like this one) you want to renegotiate.
You are only 9 courses away from a degree. You are going to have to pay for 4 years of student loans any way (I don't know about Canada; but in the U.S. the only way they don't come due is to stay in school). I would put all my remaining chips into knocking out those 9 courses and raising the GPA to 2.0, IF that is AT ALL possible. Again Canada is a strange place I have not yet visited; but in the U.S. the AVERAGE person WITH the 4 year degree makes $900,000 MORE over his/her lifetime than the AVERAGE person without ANY degree ($2.1 mill versus $1.2 mill, Day and Newberger 2002 ). My thinking MIGHT be different if you got sent home after 2 or 3 semesters but you have banked EIGHT!!! You have come too far, bled too much, and worked too hard NOT to fight the Last battle.
You put this off and life has a bad way of putting many more obstacles in your path. Certainly AT LEAST talk to your academic advisor, the dean, and an attorney to see what your options are before making the decision to surrender.