Can i activate my iphone in canada?

i have a locked at&t iphone 4. the phone use to be on a contract the eventually ran out. after the contract was finished i put the sim card away for safe keeping, but eventually misplaced it. so now i basically used it like an ipod. soon, i moved to canada. when i moved to canada i updated my iphone to ios 5. after i updated it, its telling me i need to activate the phone with a sim card from the supported carrier. can i buy a unactivated at&t sim card online to activate it? do i have to be in america in order for it to work?