Here's the rules for the half-staffing of flags....
http://www.canadianheritage.gc.ca/progs/cpsc-ccsp/sc-cs/occasion_e.cfm
"The half-masting of national flags is a well-established procedure whereby countries bestow an honour and express a collective sense of sorrow."
(...)
"When an employee of a federal department, agency or Crown corporation dies in the line of duty or by reason of the position he or she occupies within that federal department, agency or Crown corporation, the Minister responsible for that organization may decide to Half-mast the Flag. Half-masting in such circumstances can only be carried out on those buildings and establishments affiliated to the organization."
Hence, the half-staffing at DND establishments with Costall's death....
(...)
"In exceptional circumstances, and on the advice of the Department of Canadian Heritage and the recommendation of the Clerk of the Privy Council, the Prime Minister may approve the Half-masting of the Flag on the Peace Tower, and/or on all or some federal buildings and establishments in Canada or abroad, that is not provided for in the Rules."
Seems pretty clear - it's up to the PM to decide, or at least for Heritage Canada to advise and the Clerk of the Privy Council/PCO to recommend.
http://www.canadianheritage.gc.ca/progs/cpsc-ccsp/berne-halfmasting/index_e.cfm
"January 15, 2006 - Death of Canadian in Afghanistan - The National Flag of Canada is to be flown at half-mast on the Peace Tower in Ottawa from now until sunset on Sunday, January 15, 2006, for Mr. Glyn Berry, an official from Foreign Affairs Canada who was killed today in Afghanistan."
Why did nobody at Heritage Canada or PCO didn't think this was worth doing, especially in a gov't where an injured solider from Afghanistan and a survivor of the HMCS Chicoutimi problems are invited to attend the Speech from the Throne? Especially when the Peace Tower flag went 1/2 staff for a diplomat killed in Afghanistan?
As for the media, you're damned if you do, you're damned if you don't. They will always look for the "if it bleeds, it leads" story, but if they're not somewhere when Canadian men and women are in harm's way, there are going to be those asking, "why the hell aren't they telling the story?"
As a former reporter myself, I like to think anyone approaching a family in mourning would be respectful. Mind you, I've been asked by one news manager why, when referring to a man charged in the shaking death of his baby, I didn't use the term "baby killer" in the copy, so perhaps I'm still a bit naive.... :-[