It's too old for me to remember and I will need time to find the book again, but I recall Canada heavily considering a lot of different things compared to OTL such as:
- acquisition of new tanks in the late 60s, apparently M60A1 but maybe there would have been a competition with Leopard 1 too
- creation of an airmobile unit on the same pattern as the Americans, including the acquisition of AH-1G Cobras on top of transport Hueys
- serious interest in the F-105, A-7 and F-4C in the late 50s and then in the 60s before the CF-5 buy, including even the option of selling the CF-104s (due to them becoming "useless" with the rapid abandonment of nuclear weapons by Canada after their acquisition) to buy F-4s, probably with the Voodoos being replaced by F-4s for the NORAD role as well.
IIRC, the RCAN had severe problems getting its plans for frigates and submarines through as well.
I fully agree that Canada withdrew from being a serious player and basically "hit well below its weight". Military spending as a proportion of GDP was already low by NATO standards even before Trudeau came in, and then fell below 2% from 1973 to 1982 (below 3% since 1965) when NATO average was closer to 3%. The Canadian population and especially GDP were greater than the Netherlands (GDP per capita was similar), yet NL only dipped below 3% in 1969 and stayed above 2% for the rest of the Cold War.
Canada was barely able to match NL when it came to the Navy (albeit with arguably older ships) and Air Force, but its ground forces were absolutely tiny in comparison even accounting for Canadian soldiers having high training by NATO standards.
Even ignoring the idea of a more normal budget, Canada could absolutely have sustained a more coherent commitment if it limited itself to only one on the ground. That is either the CAST aeromobile force for Norway (which OTL was anything but fast since its equipment was never prepositionned as intended), or the force in Germany. Canada could have either consolidated on a well equipped aeromobile force of preferably 2 well-equipped brigades with prepositionned gear and sufficient airlift capacity to be available early in WW3, or it could have consolidated a three-brigade heavy armored/mechanized division in Germany.
OTL late Cold War Canada was looking at buying 250 to 300 Leopard 2s or M1A1s, which were much more expensive than the Leopard C1s they got only 116 of, so realistically they could have easily paid for 250-300 Leopards, enough to equip said division AND keep training tanks at home instead of buying the AVGP Cougar as a training tank and glorified FSV for CAST.
Note that the Netherlands sustained a force of over 800 tanks after 1972, then got 445 Leopard 2s, paid for a Leopard 1 upgrade AND still wanted to pay to upgrade them again since the first upgrade failed, to the point where they calculated they could actually have got some an additional 332 Leopard 2s instead. I would be asking Canada to get only a third of that amount.
In any case, with more normal spending I think Canada could easily have retained its OTL airforce AND got a more potent navy AND got either the stronger CAST or the armored/mech division, which would have been of much greater value to NATO since this could have been enough to essentially replace or add one naval battlegroup (ASW or submarine), an armor/mech division or a significant portion of the planned NATO reinforcements for Norway*. This would have been especially interesting to the US who was willing to remove 2ID from Korea to get another airmobile or mech division for NATO commitments, and the UK which was always cash strapped.
*Ignoring the fact that IMO NATO was overcommitting or committing inefficiently to Norway but that's another topic