There's been a few key moments in the recent history of the Maple Leaf on the Canadian side. VIA used to have two trains on this route as recently as 10 years ago, as shown in this timetable excerpt:
There were a number of factors that brought about the demise of the second train, including a fatal derailment in 2012. Low ridership and lack of equipment were also factors at the time. Once the morning and evening "commuter runs" were gone, the only thing left was their participation in the Maple Leaf operation. GO was rapidly expanding and was expected to step into the void a lot sooner than they have. Niagara Falls was not the priority however, but rather the intermediate stations of St. Catherines and Grimsby, which were developing into bedroom communities for Toronto. Service started up on weekends only with support of the Niagara Parks Commission - an odd move for a service dependent on commuters, but again this is when GO had "spare" equipment available. The train was somewhat of a success and expanded to daily in 2019, where it became quite popular. Before Covid service had expanded to 2-3 trains daily (varied) with plans for a 4th. All but one were extensions of Hamilton trains that ran express to/from Toronto during rush hours. (I won't go into more detail here, but GO served two stations in Hamilton on different routes meaning not all trains could continue to Niagara Falls.)
A major bridge project truncated the Maple Leaf at Niagara Falls, NY, for several months last year. This gave all involved a chance to assess other options for Toronto connections.
While all this was happening at VIA and GO, the decade-long reconstruction project continued at Union Station. At one time a US Customs preclearance facility was proposed, but like Montreal's it faced monetary issues. One problem was solved when the Union-Pearson express train was up and running, since US officers could easily attend only when needed. This went quiet for a long time, but I believe the final nail in its coffin was the election of the current provincial government. Part of their platform was beefed-up rail service in Southwestern Ontario, including trains to Detroit. Formalities for these would be done in Windsor, ON. That left too many "ifs" for a once-a-day train to Niagara Falls that would have to run non-stop in Canada to be practical. I understand the space originally allocated has been used for other purposes.
As Stage 2 of reopening spreads here, GO has announced major restoration of services and train lengths to meet demand, including one frequency to Niagara Falls, with more details to come. Like most places in the US, who knows whether demand will reach previous levels? Couple that with a border some think may remain closed until year-end and the future of the Maple Leaf as we know it or a replacement commuter service are anyone's guess.