According to the newspaper, Canada has 62 diplomats in India and India had said the total number should be reduced by 41.
Canadian Prime Minister Justin Trudeau declined to confirm reports of the expulsion but said Ottawa was not seeking to escalate the controversy.
“We are taking this very seriously, but we will continue to engage responsibly and constructively with the Indian government,” he told reporters on Tuesday.
The Indian and Canadian foreign ministries did not immediately respond to requests for comment.
Indian Foreign Minister Subrahmanyam Jaishankar said there had previously been an “atmosphere of violence” and “an atmosphere of intimidation” against Indian diplomats in Canada, where the presence of Sikh separatist groups has disappointed New Delhi.