Clause-by-clause consideration in the Canadian federal parliament takes place in a committee designated to study the bill in question.
Generally speaking, clause-by-clause consideration in committee takes place in-between the second and third readings of the bill; however, the House of Commons (or the Senate, as the case may be) do have the authority to refer a bill to a committee before the second reading stage has been completed.
While studying the clauses of the bill, the committee can choose to adopt them, delete them, or amend them.
The House can (and often does) change, overrule in part, or entirely ignore the recommendations of a committee.
This convention is in place in order to prevent a committee from attempting to withhold supply from the government.