Translation:In Canada we speak English and French.
The use of "on" is used as a generic pronoun meaning "we", "you", or "they". "One" is possible, but it often does not sound as natural. You may also say "people" in a context such as this (but not "the people").
I agree, that is certainly something a Canadian would say and should be accepted by Duolingo. It must be a local thing because my Australian wife thinks using 'one' in that context is weird but it sounds natural to me.