A couple of points seem to be missing from the discussion here.
First, is the ISP's ability to volunteer the information. If I were on the receiving end of that fax, I would have provided the information too (once I was sure it really was the police, and not just some scam). My defense to criticism would be:
-illegal activity/failing to secure your system puts you in breach of your TOS*. We owe you nothing.
-they're our records we can do whatever we want with them. You breached your TOS, remember.
-we are a good Canadian company and don't fear the police. In fact we want to help them in their efforts to get the bad people off the streets.
Another point is that having an IP address does not mean charges will be laid. It is mearly one step in the investigation.
*These are both terms in my ISP's TOS. I should also point out that my ISP has refused to give IP's to copywrite lawyers waving civil lawsuits around. I think its fair to say that criminal code would be handled differently.