The idea is you scale your rate to include enough for a benefits package.
Or they use a POE/EOR service, that's possible in Canada I think.
Either way, incorporation still has some advantages, one being that you time shift your pay as needed. It can make it easier to subcontract people too. And it's easy, and only costs a few hundred dollars.
My employer is using Deel, paying me as sole proprietor, and that's fine. Deel can also act as an EOR and I could be "full time", and that could offer benefits. But it feels like a bit of a veneer overtop over what feels like contracting anyways, and it would mean less $$ in my pocket. It doesn't make a lot of sense.
Especially now that pharmaceuticals in Ontario are free for kids whose parents don't have a plan.
Also, it seems that telling my dentist and physiotherapist that I don't have a plan seems to make them behave more responsibly, on the whole.
If I end up at some point landing more clients and I end up being more consultant than single-client contractor, then I will incorporate.
FWIW an EOR/POE is more about the convenience for the employer, not you - they don't have to establish a local business presence, register a bunch of tax accounts, etc. You can end up technically employed by the EOR with access to a decent benefits plan etc., and paid directly by payroll. At least that's how it works in some jurisdictions, as you note. It's different all over, but can make a huge difference in somewhere with crappy medical coverage, or other benefits you want to keep consistent.
So I'm also working as a contractor for a US (well, international remote but US incorporation I guess) company right now. And, yeah, no benefits isn't great. But I have also found that paying out of pocket for dental, etc. is better than buying a plan for myself.
Also a bit of a bummer that CRA has tightened up incorporation stuff a bit since the last time I did this. Given I have a single client only right now, I'll just be doing sole proprietorship.