I'll admit to a passing interest in this type of thing (odd as it may seem) so I'll add my two cents.
The Navy has generally used a variety of factors in deciding the names of ships: some political, some historical.
By "political", I mean that you'll generally see a wide variety of names reflecting a cross-Canada focus in a larger ship class, usually with one or more linked to Quebec (for obvious reasons). Locations are "safe" and promote a link to the community, as has been pointed out.
However, the Navy being a history-conscious service, there is typically an attempt to make a historical link. Thus I believe that there is a priority for "reviving" ships' names, with priority going to ships lost in action or to ships "victorious" in action. See the histories of the Halifax class frigates, for examples. (
http://www.navy.forces.gc.ca/mspa_fleet/fleet_home_e.asp)
I suspect that any new ships will be named in accordance with previous practice: a mixture of the two factors. It's possible that completely new names will be introduced (as they were with the subs), but as you can imagine there'll be much agonizing before names are announced.
As for naming ships after people, the Royal Navy does it on occasion (HMSs Anson, Howe, Queen Elisabeth, Nelson, etc., etc.), so there's little reason why we couldn't. The Yanks take it a bit far (so and so was Under Secretary of the Navy under Eisenhower, for example), but VC winners would be just fine - last names only (HMCS Grey, etc.).
Finally, my opinion: revive the cruiser names for the amphibs (as what will certainly be the largest ships in the fleet). This means, alas, naming them after Ontario and Quebec, but gives a decent historical foundation. For the support ships, stick with the names we have - there's a great deal of precedence for this. Icebreakers? If built, use VC winners, as this will match the Coast Guard's tradition of naming its ships after people, but use last names only to avoid them sounding too "Coast Guard" and/or USN.
FWIW on a Sunday night...
Teddy