According to instructions - see www.irs.gov/pub/irs-pdf/i1099msc.pdf
File Form 1099-MISC, Miscellaneous Income, for each person to whom you have paid during the year:
•At least $10 in royalties (see the instructions for box 2) or broker payments in lieu of dividends
-exempt interest (see the instructions for box 8);
•At least $600 in rents, services (including parts and materials), prizes and awards, other income payments, medical and health care payments, crop insurance proceeds, cash payments for fish (or other aquatic life) you purchase from anyone engaged in the trade or business of catching fish, or, generally, the cash paid from a notional principal contract to an individual, partnership, or estate;
•Any fishing boat proceeds; or
•Gross proceeds of $600 or more paid to an attorney
So if that are commission - they assumed a payment for services and that reporting form is required.
As the payee is in Canada - you need to verify if services were provided in the US or abroad. Compensation for services provided in the US - there is a mandatory withholding
, while there is no withholding if services were provided in Canada.
Also the payee might claim tax treaty benefits to avoid withholding by providing a signed form W8BEN.
Let me know if you need any help or clarification this matter.