I think if Canada was just two or maybe even three BCs wide, we probably would have settled on just one timezone for the whole country, but the country is so wide that the sun today will set 4 hours and 6 minutes later in Halifax than it will in Vancouver, we just fundamentally do need timezones inside the country, otherwise it'd be a total mess.

Once you start putting timezones inside a country, the provincial borders start to become pretty natural places to put timezones.

And yes, you are correct that the small population makes it easier. Or rather, it's less about the small population, and more about the spikiness of the population. Practically Nobody lives anywhere near the border between BC and Alberta, it's a gigantic mountainous national park the size of a medium-sized European country. Almost everyone in BC lives in Vancouver, and almost everyone in Alberta lives in Calgary or Edmonton. When I lived in Edmonton, it'd usually take me about 12 hours to drive to visit my parents near Vancouver, and if I was in Calgary it'd take around 10 or 11 hours. So putting a timezone change at the halfway mark is pretty much irrelevant.

The strong interconnections and vibrant border regions of European countries are the main reason so much of the EU is in one timezone. If it weren't for that, it'd probably make sense to put a timezone border between Germany and Benelux / France, but that'd be too annoying for everyone, so people just put up with a wide timezone. e.g. this map gives a good idea of where the 'natural' timezone boundaries are, and lets you compare against what people decided on based on political / economic realities.