I must admit that I have not been aware of any credible arguments that it is not constitutional. This legislation successfully attempts to skirt the constitution by limiting itself and by not actually calling for the election of senators, which would be democratic but not constitutional because it would violate the constitutionally enshrined principle that senators are appointed by the Governor General.
However, they are appointed, and this is a convention that has sprung up in Canada since Confederation, on the advice of the prime minister. Therefore, if the prime minister's advice is guided by the choice of voters choosing to make a recommendation under the Senate Appointment Consultations Act, that would be constitutionally permitted.
We do have two precedents for this. One is the recent announcement of the appointment of Bert Brown, who was elected through a consultative election in the province of Alberta, to the Senate. Nobody is contesting the constitutionality of that. The second one was the appointment a decade ago of Stan Waters to the Senate by the Governor General on the advice of Prime Minister Mulroney after being elected in a similar manner in the province of Alberta.
I think the constitutional scholarship would all be on one side that in fact this is entirely constitutional by acting as a piece of legislation and being truly advisory.