I need advice from a contractor. Am I being scammed?

Hey everyone.

I need some help. I have recently hired a contractor to finish my basement. I hired them because of their great reviews on Google and HomeStars.

To date, the work and communication has been great. However, we are now at the stage where drywall has gone in, and flooring is in. I went down there a few days ago and noticed it was very cold down there. I ended up buying an ecobee sensor to measure the temperature of the basement, and it was reading 16 degrees (Celsius).

My home was built in 2001, and the basement walls had only half the wall insulated. When we were taking meetings with the contractor, we said a lot of things about comfort etc. I assumed wall insulation would be part of this. However, to my suprise after finding the temprature of the basement to be 16 degrees, I took a look behind the wall to find that they didn't add any insulation at all. They only added insulation to the ceiling (which we requested to increase comfort and sound damping).

I have talked to them, and they are adimit that this is an HVAC issue and not an insulation issue. To thier credit, they are doing a deep investigation into the HVAC system (furnace is brand new), but I wonder if they are doing all this to hide the fact that they messed up/forgot or scammed me out of the wall insulation. They keep saying that the half wall insulation is enough and the HVAC system just needs to be fixed and everything will be fine.

So my question to a contractor here is... Are they just trying to cover up the mistake? Or is this real? is having the 1/2 wall insulation fine?

EDIT: I live in Canada, where it get's cold in the winter.