Hi Kaytee,
I bought a new, never been started Polaris crate motor last year from the US. It came with flywheel and recoil. The cost was about 3,400 usd plus $100 shipping and then 6% tax at the border. In your case, you would be about $4,000 cdn and then you have to install yourself. I'm in BC.
A good comment would be that you were never given the choice to pursue other options and you would have bought a motor and put it in yourself had you the chance.
I can't give you much advice on how to present your case but definitely speak directly to the owner and be calm and to the point and have proof to back up what you say. i.e.-quote on new Polaris motor etc.