The RCN has switched away from No 3s for shore units in Esquimalt as well, so I suspect there is more than just the CA's DEU shortages at play.
I wore No 4 "Work Dress" for the first few years I was in. It was dropped to simplify our orders of dress, and because it didn't look "military" enough.
I suspect the shittiness of the uniforms is exactly why it has been relegated to being used only a few times a year. If we had a "service" dress that wasn't miserable to wear, people wouldn't object to wearing it so much.