A "significant concentration" of the virus was found last week on two poultry farms in the Fraser Valley, an agricultural swath of land stretching100 kilometres (62 miles) east of the port city of Vancouver.
Officials said the disease was likely transferred "mechanically" from the first infected farm to the second, "hitch-hiking" on boots or equipment or passed from wild birds.
Both farms are owned by the same poultry producer.
Cornelius Kiley of the Canadian Food Inspection Agency said no other traces have been found on some 78 poultry operations quarantined within five kilometres (three miles) of the infected farms.
Some 4,500 birds had been tested so far, he said.
Further tests should determine the subtype of the virus in the coming days, Mr Kiley said.
Agriculture and health authorities worldwide are on high alert, fearing a global outbreak of the H5N1 high-pathogenic virus now in Asia.
Since the discovery of the first case of H5 bird flu in Canada last week, Taiwan, Hong Kong and the United States have banned poultry imports from British Columbia and Japan has imposed a nation-wide ban.
Officials said all 57,800 ducks and 1,300 geese on the two farms were destroyed and on-site composting of their carcasses was underway.