My understanding of how this electoral system would work is that if you had a preferential ballot and all 24 Ontario senators were elected at once, you would be assured of election if you received just over 3% of the popular vote. That's a very low threshold, so it wouldn't squeeze out the small communities.
Small communities would get into more trouble if you increased that threshold by having a smaller number of senators elected. It's like the issue of representation by population and proportional representation systems. Where do you want to set the threshold? Do you want it so you can get elected to the Ontario Senate with 3% of the vote? Or do you want a threshold to be somewhat higher?
It depends on your definition of democracy. Do you want those thresholds to be radically different across the country, where you can be elected as an aboriginal candidate in Ontario with 3% of the vote, but in Saskatchewan it takes 12% or 14% of the vote?
These are the design details that I think are hinted at in Bill C-20 but are not fully explained. To my mind, they're important decisions to be addressed. They're not incidental.