I just heard from a couple of 3rd year Eng students that the Eng Phys faculty is getting rid of its streams next year. So, we wont be able to specialize in anything. Is this true?!

I doubt its true, just talk to sally williams or the chair of eng physics...i really doubt they are gonna do that.
That's just my opinion.

Wouldn't they have to provide some kind of notice before making such a substantial change?

I would presume that they would only make changes that affect incoming students, not students already enrolled in the program.

Well since its a small program already, I understnd it could be a budget cut thing. but you should still be able to take the courses geared towards whatever stream you would like