Yeah this happens/is normal. As it was explained to me in the various SSHRC application workshops I've been to, applications should be legible and make a case to people who are not specific subject experts in your area.
I am in a very niche, understudied, and oft discounted (because it is feminized) area of my field, which has made it a real uphill battle for people to take my research seriously. I wasn't successful in my app last year and had only one person in my field (who wasn't even close to my research niche) on my committee (I'm also on committee 3). This year, I had several colleagues in other social sciences and humanities fields, as well as non-academic friends and family, read my application for clarity and to make sure I wasn't using jargon, writing for too niche an audience, or being too overly academic, and my app was successful! Obviously this wasn't the only change I made, but I think being really clear about how your specific niche is not just important in your field but also how your findings can be important to other fields in the social sciences/the Canadian public more broadly goes a long way.