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Prosecutors dropped the charges after finding that conviction was unlikely.
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Theme park says the sea lion may have been the oldest in captivity, though critics dispute that claim.
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Target of defamation suit returns the favor to the theme park, which has sued several former employees over criticism of the park.
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This time the park sues for $2.5 million.
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Theme park says newspaper reports contained false and defamatory information.
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Suit alleges that the trainer planned to steal a walrus from the theme park.
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Questions raised by Toronto newspaper prompted the action.
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Attraction says it looks forward to getting the truth out after the employee made negative statements to a Toronto newspaper.
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Canadian zoo association says that everything at the theme park, which has been under attack by activists, was in order at the time of inspection.
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More than 100 protesters made their case against the Niagara Falls theme park for allegations of animal abuse.