At present, it is not possible to apply an XSL Transformation (XSLT) to an XML file within a Canvas App. This PCF control provides a solution for performing the necessary transformation with ease.
Generate the PCF solution using the repository. Import the same to your power platform environment. Please enable using code components within Canvas Apps at your environment level. Below is a quick demo of the PCF Control
Unmanaged Solution - XmlTransformationPCFControl.zip
Managed Solution - XmlTransformationPCFControl_managed.zip