Whatever they were intended for, the Denims were worn in the field as combat wear in hot weather or to augment the wool BD in cold weather.
I thought the Milifax webpage on Canadian military vehicles mentioned the reason for the camouflage paint switch; it seems to me that it had something to do with pigments, as I posted above. It would seem a likely reason for the colour change in clothing as well, whether or not those pigments used for dying clothing were the same as those used in paints.
Incidentally, Khaki Drill, which was intended for use as combat dress, was a somewhat bright golden yellow shade (certainly in relation to British items I've seen - Ed can provide clarification I'm sure) when produced in Canada. I'm not sure the camouflage properties weren't at some level secondary considerations.