Afaik, Canada has already put a similar plan in action, with provincial online poker sites to be run as a network through the Boss Media Network.
Once all of those rooms are operational (I know there was a bit of a snafu with the BC one), don't be surprised if Canada starts locking out foreign poker room providers.
I know it's probably bad form to quote myself, but I pretty much agree with Dennis on this one. There are already set target dates for setting up the Ontario, Maritimes, and Quebec skins on the Boss Network and we've been effectively blacked out of the Boss Media Network until they're properly set up.
Could be though, that they let us (hate saying that) play any of the sites, just making their own provincial site appear "safer"...and market that way?
I really hope that this is the case, but somehow I think it's more likely we follow the French and future US regulated method.
That said, there will always be cowboys in the market without any hope of regulation (ie - UB/AB, Bodog, certain Merge skins, Everleaf), because they run side games and sportsbooks which will not allow them to ever receive licences.
If you can't get a licence, there's no reason to follow the rules necessary for getting one, so it's expected they will continue to service blacked out markets.