@Aerethiel It is supposed to prevent that kind of thing in theory, but the big players to the market in Canada (Bell, Rogers, Telus, and Videotron) all have such DPI systems, which absolutely CAN and DO decrypt. Until Bill C-9 passed just recently, this practice was highly illegal, but since the passing of that bill, it has become the "standard" practice.
There are other countries like Turkey that come to mind that have the same kind of DPI system. I don't know if their systems can read the actual traffic though to tell what kind it is, or if they can see the actual content as well, but I know in Canada (and likely also the USA), the big player providers (and by extension, the government) can not only see what kind of traffic is being transmitted, but they can also see the content of the traffic too.
This means that for anyone who has smart home gadgets or appliances that connect to their home network, the government absolutely DOES know what you have, what you've got things set to, when you're home or not home, and so much more, as they read all the data from such gadgets to keep track of the people. It's actually kind of scary.
Sadly even in Canada, especially with the recent passing of Bill C-9, a VPN doesn't help... It will keep other people on the internet from seeing what you're up to, or even seeing where and who you really are, but it absolutely will NOT stop the government from prying into your business.