License plates in Ontario come with a 5 year warranty. They can be replaced at no cost as long as the damage is considered a defect.
Apparently, old plates used a slower process where the aluminum was painted on directly and baked on. The new process involves printing the plate on reflective vinyl sheets and it's adhered to the aluminum plate. They can print more plates this way because they don't have to wait for them to dry. They started this about 10 years ago which is why you notice tons of vehicles with peeling plates now a days.
A lot of states in the USA have moved to this process too and have had the same issues. Not all states use raised lettering anymore, but states that do were more prone to peeling. The edges around the letters and numbers create a weak point in the sheet where daily weather can find its way in and under.