Just about any sex for money, including erotic stimulation, is interpreted as falling under C-36, according to interpretations from the department of justice. Whether these interpretations would stand up to court challenge, including the SCC, is another question.
I believe that crowns are leery of prosecuting those charges, because the courts could invalidate the law (again). Until the courts decide, C-36 imposes a certain deterrence among the general population, since it's not everybody who has the time, money to fight those charges, and who doesn't mind the public notoriety that would result. The Crowns expect that people will plea bargain in the meantime, and C-36 will have done its job of reducing the sex-trade.