The very basic fact is, logs are required to verify that the Can con regs are properly met on all radio stations in Canada. (Can Con is roughly 35% for most radio stations)
As for what will happen to 88.1 FM, The CRTC can't just toss anything on there.
If Carn wants to have 88.1, they'll have to put up a fuss like everyone else.
CKLN will most likely cry out that they deserve another chance. (regardless of decisions made)
CIUT (89.5FM) wants to get a sister station up and running on 88.1 FM, but to be fair, they claim CIUT will serve downtown Toronto and areas around there while their sister (internet) station would serve Scarborough and areas around there if they could have an FM broadcast license.
Here's their Scarborough community station: (Broadcasting from the U of T Scarborough campus):
http://www.fusionradio.ca
As strictly a guess, another possibility might be CIRR radio (103.9 FM, a radio station serving the gay community) wishing to move down the dial for a stronger signal.
Regardless, I do hope when all is said and done that 88.1 FM continues to be a community radio station of some sort, and not a commercial license.
Evanov group (owner of 103.9 FM) does fall into that as a loophole because, although they are not a campus or community radio source, they are serving a type of community. (& their lifestyle)
I'm supporting the idea of Fusion radio going FM, even if they don't get 88.1 FM. They deserve to have something...even if it's a low power of some sort.