As to the consequences, well aside from moral bankruptcy (but then again Chrétien already had that in spades). The Liberals would have even less of a chance of winning a seat in Québec, never mind the sponsorship scandal. So a strengthening of the Bloc is most likely (like they needed any help). This screws up the federal elections even more leading to a series of minority governments, even weaker than the ones we have now, no guesses to who comes out with the PM booby prize, but likely the Bloc is in official opposition.
It also strengthens the NDP, at the expense of the Liberals, which could give the suddenly united Conservatives a boost in places where they aren't the strongest. This would also force Martin to delay a federal election right up until 2005, when he'd have to call it. Because majority or minority, the next government would not be Liberal. There would be no Martin minority in 2004/5, instead there would be a Liberal majority until the election, followed by a government composed of whoever won in 2005. Probably Tory (Or Alliance, the Conservatives might not reunite. They may not need to...) with the opposition split three ways and very weak.
As to our military, well they're running pretty ragged due Kandahar right now, I can't imagine what seeing action in Iraq would do to troup levels and casualty figures. More than likely the Americans would only want us on for PR anyway, so maybe like in the first American Invasion of Iraq only the air force would be committed, what good they could do is beyond my limited knowledge of military capabilities.
If it was the Air Force, they would do about the same as they did in Kosovo. Which is that they would punch far above their weight. And Iraq in 2003 would have been a good field test for the upgrades that the CF-18s got following the action in Kosovo. Depending on how it went, the result could well have been the Air Force getting new planes, rather than the life extension program for the ones we already have.
The Air Force going is what my father thought was going to happen. However, he wouldn't have got to go. (He was in Borden at the time, and that isn't a fighter base.) But the again, he missed the first war by about three days. The rotation he was part of (which would have sent 421 Sqn over) was packed and ready to go when the war suddenly ended.
If ground troops were used, that would mean that the expansion of the Afghanistan mission that occurred in 2002 never happened, so there would be small numbers of troops there while the bulk went to Iraq, rather than a small (about 100-120) number of troops went to Iraq (Why do people even deny this, it raised quite the shitstorm at the time, and it is one of the reasons that that asshole Chretien should have at least given the mission upport rather than public condemnation.) while the huge number went to Afghanistan.
The Navy actually did participate in Irqai Freedom, as part of the escort for one of the US carrier groups in the Arabian Sea. It was touted as being part of the Afghanistan mission, but what they were escorting was bombing the shit out of Iraq too. That doesn't get mentioned by people who say that we weren't involved in the war. F***ing two faced lying bastards.