You could probably move up to four tracks on the entire Milton corridor and get continuous all-day rail plus CP freight without too much difficulty. Three-tracking parts in Mississauga alone might get you most of the way there. CP just won't be inclined to hand over the keys, that's all.
The issue of a CP northern bypass comes up from time to time. I think it's even cropped up on this forum. Usually, the inciting issue isn't Mississauga, actually, but rather the North Toronto sub--there's even more CP traffic there and the right-of-way is less likely to handle more trackage--and the proponents are typically dyed-in-the-wool railfans who want passenger service into Summerhill ASAP. (Nevermind the fact it's a less desirable destination than Union for about 95% of 905 riders, but I digress.)
Anyway, the usual solution advanced is a CP bypass more or less parallel to CN's northern bypass, using the 407's utility corridor. I could be wrong, but I think back when CN's bypass was in the planning stages, the original plan was for it to be a unified corridor for both railways, but CP dropped out. CP does have a fair bit of sunk infrastructure along its existing line that would be rendered useless (Lambton yard and Leaside yard) or be inconveniently laid-out (Agincourt yard) if it moved to a northern alignment.
Back to the Milton line, I'm actually personally pretty bullish on its suitability for all-day service. Because of various quirks of historical land-use planning, the proportion of corridor that's residential versus heavy industry is much better than most (any?) of the other lines. With the exception of Dixie, pretty much every station is surrounded by residential/commercial uses and could nicely evolve into a pedestrian/cyclist friendly hub. Fat chance of that for the Bramalea and Appleby stations of this world.
But no, you're not going to be blasting around the bends at 135 km/h anytime soon. (At least, not until someone tries to rig active tilting tech onto a Bilevel for an episode of Monster Garage or something.) So long as CP has heavy through freight movement, non-FRA-compliant EMUs mightn't ever be doable, either.