For anyone interested in forming a unified American government through the Interventionist branch in Canada's focus tree, it seems like taking these steps will prevent the game from crashing, albeit at the cost of the puppet government being unable to field an army as it seems that somehow division deployment/movement on part of the unified tag is causing the game to crash. However in the meantime, it seems that this is the only workaround, if you don't want to just annex the former USA into Canada or keep the breakaway states as your puppets. In my case, I have been able to play the game after following the steps listed below for several in-game months without any crashes to the desktop.

To get the Confederation while not having your game crash right afterwards, you need to take these steps:

1) Pause the game and click on the "form a unified government option" in the Ultimate Fate of America event (don't unpause the game or it will crash to the desktop!)

2) Tag switch to the Confederation (in my case, the tag was labeled D01 but that could change depending on each playthrough, so use tdebug and hover over the unified government to see its tag)

3) Delete all units (you can either manually disband them or just use deletellunits D01 (or any other tag the Confederation uses) and delete as many division templates (especially those inherited from tags like NEA (the APC), USA (the AR), etc.) as possible to ensure the unified government can't deploy large quantities of divisions to minimise risks and regularity of game crashes.

4) You can now tag switch to Canada and the game should run normally for long periods of in-game time to make it at least somewhat playable.

EDIT: I was able to finish a full game without any crashes by following those steps but again, at the cost of the Confederation being more of a cosmetic addition to the map instead of a useful ally