When these issues raised their head the conversion was less than 10 years old. I talked to the 105mm LCMM about all this stuff over three interviews over about six hours and a bunch of lengthy emails. Same with folks higher up in the CAF. I'm pretty sure this was never an issue that hit the government but stayed internal to the CAF - even more it stayed internal to the army.
At the time the C3s were already over 50 years old and no one was going to spend a lot (read that as any) money on them. The M777 came on line in 2005 and by 2006 everyone was pretty sure it was the greatest thing since sliced bread. They wanted more triple 7s and we quickly got up to 12 and then more slowly to 37.
As Afghanistan progressed the C3 (and the LG1) all became more a Militia gun and not high on anyone's priority except internal to the arty. Remember with only a dozen M777s until Afghanistan was over, (6 in theatre; 6 at home) even the RegF had to use the 105mm for a lot of their training. There was a brief moment (I think in 2009 or 10) where the 105s were relegated for divestment although that was quickly reversed since there was zero replacement on the horizon. It hasn't been considered an "operational" gun for well over 15 years. The plan is to replace the 105s with something modern but that's been a plan for a long time. IFM is looking at 155mm SPs (to replace the M777) and mortars so take a guess which way this is heading for the reserves.
I'll give you my personal opinion. I think we should keep the M777s (maybe some LG1s as well). We should give about 2/3s of the M777s, the SPs and the HIMARS to the reserves. Cut each RegF regiment to one battery and make the 2nd and 3rd batteries ARes. The 600 PYs that are saved should all be converted to air defence. The four or five ARes arty units that are left over become loitering munition launcher batteries. The C3s will then be given a nice retirement ceremony and then be relegated to saluting troops. (Maybe let the 400,000 look after that)