I don’t think the school funding is the issue, really. The issue is the government driving its pro-abort agenda without regard for its own citizenry, who would not send their children to a Catholic school if they objected them taught Catholic values.
I think that once a Catholic school denies that abortion is evil then that school is no longer Catholic. In a sense it invalidates the BNA of 1867 (Canadian constitution). This is the issue in my mind.