If your museum is like any that I have worked with, if there isn't currently a premium on storage space, there will be. The a large part of the idea of sliding racks and compact storage is to get the maximum amount of collections into a minimal space. The thickness of even the slimmest of crates will probably reduce the amount you are able to store by 50% at the least.

Storage in crates is also less than ideal as the access to the works becomes logistically very difficult. Think of the little tile puzzles where you slide one up, another over into that space, etc... except in three dimensions. Storing in crates should ideally be in crates that were designed with long-term storage in mind and have surfaces sealed and with all contact points having proper barrier materials to protect the art. It is done this way in commercial art storage for certain objects, but not as often in museum.

An even more important thing to me is the fact that the object is held away from view. It is externally protected but becomes very difficult to inspect for less apparent types of damage that develop over time (molds, insects, inherent vice deterioration). Out of sight, out of mind. You haven't mentioned any possible seismic concerns, but the Toronto location on your post leads me to believe this isn't a problem.

I hope some of that helps. I'm sure you are aware of much of it, but it may help reinforce your position.

Good Luck.
Jamie Hascall
Chief Preparator,
Museums of New Mexico
Santa Fe