These bolded points are either not true, or debatable.
-There is not, as far as I'm aware, ANY documented or specific law or reg - in Canada at least - that a passport, in particular a foreign passport, is some 'dominant' or controlling source of true/final definition of one's name. It would be a legal nonsense in Canada, because Canadians are not required to have passports, and there is no central national registry of names. (Civil law is a provincial responsibility).
-Change of name is a provincial responsibility, and the only requirements for that are that the individual be resident in the province for a certain period of time - again, no requirement that it be reflected in one's foreign passport or 'approved' by a foreign government. A resident of Canada is ... a resident of Canada, and can use legal facilities like change of name.
-A photo-bearing driver's licence is in actual fact an identity document, in every province I'm aware of. In most, you can get a 'photo ID card' (various names), but you are NOT allowed (all cases I'm aware of) to have a photo ID card and a driver's license - demonstrating that it very much is considered an identity document.
I will agree that in most cases, it would be best for applicants for citizenship to apply for citizenship using their name as shown on their PR card. But it's not formally required, just that you'll have to show that they should use your 'new' name (with supporting docs).
Another route would be to apply for a PR card under the change of name procedures - but that would likely take longer than changing your name under provincial procedures, and a legal change of name (appr'd by the relevant province) is usually going to be faster (and definitely would be accepted for citizenship app).
