For one, Canada is -- like it or not, take it or leave it -- a country founded on Christian principles where the vast majority of citizens are Christians,' Yes, there's separation of church and state but even that was a principle founded by Christians and Christianity.
Contrary to popular belief, Catholics were never the only religious group in Ontario that were afforded the right to establish their own publicly-funded schools; the Protestants also do. In fact, Penetanguishine has the Penetanguishene Protestant Separate School Board, which is also publicly funded. It just so happens that Protestants never expanded throughout the province in the same way the Catholics did.
The Catholic school board is NOT exclusionary. Atheists, Christians, Jews, Muslims are welcome to go to a Catholic school. Muslims have prayer rooms in Catholic high schools.