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@EnglishAlan Personally I believe they took advantage of you. (jimho)
Unfortunately in order to receive a one-year extension you must have at least one year of validity left in your current foreign passport.
Technically the worst outcome in your specific scenario is that IMM could've turned you around and flatly refused an extension back in January. Hence look at the bright side. ;-)
Edit: added 'back in January' for clarity
Note: when I updated with Edit it created a new post. I will delete the former.