The woman, Rajvinder Gill, went to Pakistan to try to settle a financial dispute but disappeared.
Her father went to the police after she didn't contact her family for weeks.
The lawyer, Aftab Bajwa, who represents the woman's father, said the police chief of the eastern city of Lahore told a court Wednesday that a suspect confessed to killing the woman. A police officer said the suspect confessed to working with a German of Pakistani origin who was involved in the dispute, and together they killed the woman.
The suspect said the second man has fled the country.
A spokeswoman for Foreign Affairs says Canadian officials are providing consular assistance to the woman's family.
Police have not found the woman.
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