If your making the slippery slope argument sure I can agree there is a risk.
However its saying digital validation for federal benefits - I mean given the amount of fraud in the US social security system of recent years it seems like having some kind of protection is important to not waste our tax payers benefit. And if you cross the border you are immediately in a digital system in the US.
That said this isn't saying digital identity for websites similar to what AUS is proposing.
https://www.todayville.com/canada-moves-forward-with-digital...
https://www.ourcommons.ca/Content/Committee/441/FINA/Brief/B... "Oct 7, 2022 — Recommendation 1: That the government drive economic growth by prioritizing and investing in the government's digital identity mandate."