(The following is a re-posting of thoughts I posted to the GOSLING mailing list in response to questions about why the government created the Open Government Licence – Canada rather than adopt the generic Creative Commons or Open Knowledge Foundation licenses)
This OGLC license has an advantage to the government in that the license itself answers many of the most common misconceptions (IE: privacy, third party rightsholders, non-copyright rights) when dealing with government data that doesn't seem to come into play with other knowledge sharing.
While I understand the point about license proliferation, most of the practical problems don't apply to this simple Attribution license. The majority of the problems with license proliferation come from more complex licenses, with the worst being the reciprocal/share-alike/copyleft style licenses.
In all I think having the government use a perpetual Attribution license like this is preferable to using a third-party authored license, especially one authored in the context of a foreign jurisdiction with very different Copyright law.
I assume you read the linked "Open Government License Consultation Report". If I had been consulted I would have done as they did, and they even had feedback form Creative Commons Canada (as much as that "organization" can be said to exist). The uncertainty about license compatibility is a valid one, but applies even more to the "ported" creative-commons licenses than it does to OGLC 2.0. When and if Creative Commons gets its own house in order, we can start to worry about other like-minded licenses.
The only "license" style that would have been "better" (for my evaluation of better) would have been a CC0 style public-domain dedication + license fallback. I believe in the abolition of Crown Copyright, with a CC0 for specific released works being a step in that right direction.
See also: Teresa Scassa's blog