In 1988 Eden Christian College in Niagara On-The-Lake was facing very serious issues due to declining enrollment. The solution they pursued was to join the Lincoln County Public School Board as an alternative religious school within the public board (as per the current Conservative proposal). Teachers' salaries almost doubled immediately and they were given a new computer lab. They eventually moved into part of a public high school building in nearby St. Catharines. There were no obvious detrimental 'strings' at the time, at least for the first year.
But within a few years things began to change. The public school board told them that they could no longer require students to attend chapel or take religious courses. Those would become optional before or after school programs. They could not hire teachers or principals on the basis of their beliefs, only that they were sympathetic to Christian beliefs.
This year the public school board hired a non-Christian to be the school Principal. Within the first 3 years of becoming part of the public system they were ordered to remove the word "Christian" from the school's name. They became Eden College. Last school year someone found out that teachers actually prayed in their staff meetings. That was outlawed too. In my opinion it would be extremely unwise to ignore this precedent when considering the Conservative plan.
There is a big difference between a government handout and a tax exemption. Whereas a tax exemption would allow you to opt out of paying for the public system, a government handout must be applied for. If you have to apply for anything, there will always be a set of conditions. Conditions mean unwanted interference and the possibility of curtailing the practices that make religious schools what they are.