Well I only know how things are from my experiences. If they're different out west well I'll take your word for it.
"Perhaps this should be a Provincial choice because frankly, I don't think our customers would leave us for a highly monitored and likely filtered government backbone. With the types of people who run our government....how can you even consider giving them control of your internet access? Give your head a shake man. Quit acting like we're forming a multi-term majority government here."
As if the government couldnt do the very same if they wanted to. The government is in the pocket of big business and big business returns the favor, mostly. Ultimately Rogers or Bell could decide to do the very same tommorow and start heavily monitoring (which they probably already do for CSIS/NSA) and filtering the backbone for the government.
"Oh...I dunno m8...it's quite a s-t-r-e-t-c-h from Victoria to Prince Edward Island."
It was done before multiple times (Railway, Trans-Canada Highway, Telephone/Telecom), it can be done again and probably will be done again.
"Real competition doesn't come from subsidy or government inserting itself into a competitive private market."
I would say this depends on your defininitions of real, competition, private and market

Here's my definitions.
Real: Not fake. Genuine, True, etc...
Competition: Having multiple entities in a market that have a variety of offerings.
Private: Something built entirely with private money and entirely on private property.
Market: Offerings to the consumer to purchase.
Used collectively you cannot have "real competition" when you have only two entities in the market that are offering effectively the same service at the same prices with the same restrictions and any entities which resell their offerings have effectively the same pricing points and conditions as well. You also cannot have a "private market" when corporate entities make judicious use of public land to run their fiber effectively for free.
"I can think of a lot better ways to spend 100 BILLION or more dollars."
I can think of alot worse ways to spend 100+ billion dollars. Also This is a project that would be spread out over 10+ years, it's not something that happens overnight and you're right we should start in Ontario/Quebec where the worst of the problems exist.