I am in the middle of playing this game as Germany and the Axis Minors, and I have found that the Axis have a major advantage, since the Finns can declare war turn 1, tie up Soviet troops for a turn, on turn 2, Hungary and Romania can declare war, take East Poland and Bessarabia, then turn 3, the Germans (who have built up tanks in Poland, Hungary, and Romania), can sweep through and take Belarus, W Ukraine, and Ukraine. Then, the Axis Minors can can-open Bryansk and Smolensk. Moscow falling before turn 5 seems quite possible.
As for Canada, a few subs can hold them back for a few turns. Turn 1: kill Canadian navy, turn 2, Canada builds a new navy, turn 3, Canada kills your subs. It’s quite possible for Canada to just sap 7 IPCs a turn from UK London’s money for 4 turns, without much of a return.
This also allows Italy to focus exclusively on Egypt, as Germany can use its Paris veterans to kill Yugoslavia en route to Russia t2. Bulgaria can’t defeat Greece by itself, but it can weaken it enough that either Germany or Italy can kill Greece without much fuss (together with Southern France, that’s 2/3 of the Roman Empire objective). So Italy doesn’t urgently need to provide a can-opener in Russia, doesn’t have to worry about French North Africa (at least not at first), and has Balkan allies (plus aid from Germany if need be), to knock out Yugoslavia and Greece.
I think that a few things that could help here are: giving Russia more units in the north (to counter Finland), giving Russia more units in the centre (Kazakhstan, Samara, Novosibirsk), that can fight the new Axis Minors, making South Africa or Free France stronger (to help fight Italy), and giving Canada more of a navy.
All in all, this is still a great setup! 8.5 stars out of 10.