I believe a patent must be obtained in each country a company is trying to sell the drug in, and is applicable to local patent laws. I am not 100% certain about what happened in Canada, but I believe the patent laws here apply only to the finasteride chemical itself, meaning it was valid when Proscar was available but not applicable to Propecia which was released like 8 years later.
All the patent does is stops any other generics companies from being able to manufacture or sell the chemical, but after that it's fair game. Brandname Propecia will still be around, and Merck will still probably make some good coin from the drug, but the generic option will be available as an alternative. Merck will probably keep Propecia on the market as long as it remains profitable.
Chances are, it will not significantly decrease the cost of brandname Propecia, but why wouldn't you go with the generic version instead? You won't need to even get a new prescription, just ask the pharmacist for the cheaper generic alternative. Generics are almost always identical to brandname, only they might look a little different.