How do you know how much a product costs in Bitcoins? When paying with Bitcoins how does that affect the price of the service or item? For example If I buy something that costs 20 CAD using Bitcoins and the exchange rate is 1 CAD = 0.01 BTC does that simply mean I pay 0.20 BTC? I'm not very knowledgeable about currency exchange to begin with. If the value of the Canadian dollar goes up and 1 CAD = 0.02 BTC then I would've lost money if I had did the exchange at the lower rate, is that right?

Take Privateinternetaccess for example. They have an option to pay in Bitcoins but doesn't say how much?
Most websites that accept bitcoins for goods or services work with a service that automatically exchanges the bitcoins they receive for dollars. For that reason, they also use the current exchange rate to calculate the price in Bitcoin.

So basically, when you want to buy a 10 CAD item for bitcoins, the website will calculate how much bitcoins that is and ask you to pay that amount of bitcoins.

And yes, when you hold bitcoins, the price you pay in CAD can vary as the CAD/BTC rate changes.