I'm agreeing with you but just a minor correction.
I'm not sure where he's getting those figures from either, but the ARE does provide for units as large as he is indicating. For example the Lorne Scots are configured for a unit HQ and two rifle coys that bring them to an establishment of 300. The folks with the blue hackles in Ottawa are ARE'd at 349. Most units, by far, are around 200 more or less but vary widely. On top of that, the ARE establishment is the max establishment and not necessarily the paid strength of the unit nor it's trained strength nor its allocation to mission elements.
There has, in the past been constant tension as the possibility of amalgamating units as was done in the 1960s. With good reason - it was poorly done and didn't work. Units, however, are amalgamating unofficially into tactical groups to ease administrative and training issues. They've been amalgamating for exercise purposes as long as I can remember back to those same 1960s.
IMHO, amalgamation into full units, does need to be done if the army ever decides to get serious about ARes reform. But it must be under very specific circumstances:
1) the establishment should parallel the RegF equivalent and provide for the equivalent equipment holdings;
2) where possible amalgamated units should form distinct companies in the same battalion - i.e. a coy of Wexford Highlanders, a coy of Belville Fusiliers and a coy of the bay City Regiment. - The reason for this is two fold: a) quiet the opposition from within the ARes establishments and local communities; and b) facilitate expansion under mobilization where a given battalion provides the core of three mobilized battalions.
3) there must be an integral RegF cadre - IMHO the battalion HQ and one full rifle coy are the minimum - these provide full oversight, an administrative and training cadre, a quick mobilization base/operational deployment base and RegF authority and responsibility for the unit
4) all the other things about employer legislation, mission roles etc etc that I've been banging on for years.