Overboard discharge of black water is not just a Canadian requirement. It is also illegal in all inland waters and (near) coastal waters of the US. I hope you're not currently discharging in the lake (correct me if I'm wrong, but no discharging is allowed in the Great Lakes, right?)! If you are, please stop polluting our waters.
A number of years ago I was redesigning my overboard discharge in a Sea Ray that I had. It was a 28' Sundancer, but I trailed it 80% of the time. I would use it inland, as well as offshore, but I would never use the overboard (through the hull bottom) discharge (it had a 28-gallon holding tank... more than enough for a week's worth). Instead, I would use a pump-out somewhere when I got back. Some of the inland places I went to didn't have a pump-out so I decided to disable the current thru-hull and re-route the discharge hose to a new fitting that went through the transom. This way, I could access it easily when on the trailer and could do a pump-out at home, into my sewer system. I used a different thru-hull than a typical mushroom and seacock. To easily hook a hose up, I used a "cam and groove" (with a cap for when not in used) setup which allows a quick, mess free hook-up/disconnect. I also added a remote control for the system so I wouldn't have to get in the boat to turn the key, either.
In preparing for this, especially since my system was a little out the ordinary, I researched what I had to do to make my system legal. I also physically called and talked to multiple agencies/people to find out if my system would pass an inspection.
During my researching and conversations, at no time did I find any evidence that simply removing the key would pass an inspection. The best I got was that "Only if the person doing the inspection didn't really go into much depth". I also asked about that in regards to a "standard" system and got the same answer. So, in addition to securing the thru-hull (cap, in my case), I added a secondary electrical disconnect to the wiring of the macerator - I used a "kill switch" for an engine. Every person I talked to, and since, have all agreed that this satisfies the intent of the law.
Now, in my case, I added that electrical disconnect because I had a different system than normal and wanted to physically show that I was doing my part to comply with the law. I wanted it to be obvious that I was doing my part. In your case (and anyone's that has a normal setup), the electrical disconnect would NOT be needed.
So, long story short, based on everything I researched (and have since found out), in your case you need to remove the key and physically disable the seacock. Using some mechanical means of securing the handle (zip ties, for example) would satisfy the law, as would simply removing the handle. The easiest thing to do in your case is to simply remove the handle and never put it back on, since you can't use the system where you boat, anyways. Don't throw it away, though. Store it away in the boat in case you're ever using the boat far enough offshore that it's legal. Although, it's still "best" to not do it at all. You should still "exercise" the seacock once a month, though, so it doesn't freeze up on you.
The hole in the handle is square? FYI, that is actually for a putting socket wrench in there to help move it. But, of course, you can use it for securing if you can find a suitable spot to tie it off to. for the system so I wouldn't have to get in the boat to turn the key, either.
. I use a pump out service and the discharge is below the deck floor and any access to it you must go through an access cover