Deduct is correct verb here. Penalize might work, but deduct is fine. As there was removal of points from total as an "addition". Not removal as removing some score like points gained from winning a game.
You mean like possibly that other place which is well known for various reasons where they speak English known as England?
Canada is a plural noun here, as it refers to the collective teammates, not the nation-state.
Sorry - not the plural sense, the use of "deducted" .
I agree. The points were deducted from the team's total. The team itself was not deducted (though I guess you could argue without the points, the team was deducted from the tournament, lol)