If I have summoned somebody to to small claims court in Ontario, Canada, can I cancel the suit before the trial and what would the penalties be for doing that?

Do you mean you sued someone (didn't send a summons, different thing) and now you are backing out of the lawsuit? Notify the Court IN WRITING, copy to the Defendant. If you do not do this and there is some sort of pattern you CAN be sued for harassment.

There is no penalty.

Of course, if the other person has countersued you, the case will go on and you cannot back out.