Hi JayMay. Yes it is called a dimple and yes it is caused by the security strip embedded in the paper. The note is considered uncirculated but it will not get a UNC-65 or higher. This is because in the same print run there will be other notes which do not have the dimple.
Don't try to press it out that would only reduce the value of the note.
A few years ago I went through all of my Canadian UNC notes and deposited the notes with dimples back to the bank.