Craig Gibson, 28, appeared in a Toronto court on Monday accused of killing Brett Sheffield, 38, while off-duty on a night out in Toronto on August 28.
Toronto Police said they responded to reports of an assault around 11.25pm and Mr Sheffield was rushed to hospital with life-threatening injuries.
He died from his injuries two days later on August 30.
A defence source told The Telegraph that Mr Gibson, from Dalry, North Ayrshire, went on a night out with The Highlanders 4th Battalion and struck the local man “with an elbow to the jaw”.
“The local was instantly unconscious after being struck and was later pronounced brain dead at hospital and then deceased,” the source reportedly said.
Mr Gibson served in Iraq but had been staying in Canada as part of a military exercise, according to The Sun.
A British Army spokesperson confirmed to the Standard that a soldier had been arrested and charged.
They said: “Our thoughts are with the family of the victim at this tragic time. As the matter is the subject of an ongoing investigation by the Canadian authorities, it would be inappropriate to comment further.”
Any soldier who is found to have committed an offence, including a criminal offence under the Armed Forces Act 2006, is dealt with through the disciplinary process and may face sanctions including dismissal.
Many tributes for Mr Sheffield, who founded water management business Netxgen Drainage Solutions, have been shared online.
In a statement posted to Facebook, his company said he died “due to a random act of violence”.
“His absence is felt deeply across the community, our company, and his vast network of friends and colleagues.
“Brett’s passion for helping every person feel valued and cared for, will continue to motivate us. We are finding comfort in our shared commitment to ensuring Brett’s legacy thrives. We appreciate your concern and patience as we support Brett’s family.”
Friend Shaun Cavers wrote: “One of the best guys I have ever known. He will be deeply missed by so many people. Still can’t believe that it’s actually true.”
Matt Mroz wrote: “Hopefully there’s an abundance of acres up there needing tile drainage, rest easy pal we’re gonna miss you.”