Just to follow-up with everyone. I decided to go with the dealership. Not just any dealership, I'm going to Maranello most likely.
Here is why.
Indy shops I've contacted - Ivo Columbus, Bimmex, and the ones referred to above have prices ranging from $855 to $1000 + taxes. It is 855 not 755 or less because this is for a 335 and the water pump is approx $100 more compared to the 328 or other similar cars with N52 engine or older.
They are generally a pain in the butt and most SAs don't know our cars. They will quote you based on book value in their system and require you to explain to them that water pump and thermostat are done together (parts are in the same location), so please don't double charge me on the labour.
BMW Toronto - argued that they were right. Expect $1300 +taxes.
BMW Parkview - argued that they were right. Expect $1300 + taxes.
BMW T&C - ..... you get the picture
I've mentioned that BMW Canada advertised value add pricing on their website and most of them ignored it. BMW Toronto did say they would have to match it but wouldn't offer it until I come in with proof.
The nice folks at BMW Maranello when first asked provided me with the value add pricing $711 for the WP and said the thermostat would only cost another $65 in labour to install. Total cost $1000 + taxes. No explanations needed.
The difference between the lowest cost indy ($855) and the dealership is $145. I consider $145 worth it to get the 2 year warranty on parts/workmanship since I hear the pumps sometimes prematurely fail even when new.
And just so you know, I contacted BMW Canada and explained it to them. They were of no help. The best they could do is get the dealership to contact them and they would help argue my case. Sounds ridicous and a complete waste of time for me.