According to the post above, it looks like it - only a few designated French characters are to be allowed.
Canada being a multicultural society there might be instances when more flexibility would be desirable
Judging by the experiences of a few other countries (including the ones that have backed down on such plans) I don't think IDN have a bright future in .ca.
This would concern the French domains anyway.
I just ran a check against the base of .is domains and surprisingly 2000 domains out of 35000 are IDN. Since IDN are not so mainstream I think many if not most are just defensive regs.
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