I'd like to offer a non-lawyer opinion on this matter...
This cannot be considered an "automatic firearm" due to the way it is defined in the Criminal Code:
"Succession" is defined as a number of persons or things following one another in order or sequence. Since all .22 rounds would be discharged simultaneously in this device it does not meet the CC definition of an automatic firearm, and therefore should be legal.
Additionally this device should not be considered a firearm as it is designed to be used only within a firearm, which makes it a part. If it were considered a firearm it would have OAL and barrel length restrictions, require a serial number, etc.
One might not expect the RCMP to apply this logic in their determination however.