Is it a good idea to send a reference letter upon contacting a potential PhD supervisor for the first time? I'm about to contact a potential PhD supervisor which has been suggested by my current masters supervisor. They should know each other very well since they've worked on multiple joint papers before. Currently, I have a recommendation letter from my masters supervisor but I don't know if I should provide it in the first Email. I don't know if recommendation letters are something the PhD supervisor would explicitly ask for later in the process or not.

So, is it a good idea to just blindly provide a reference letter on the first contact, hoping it would impress them more?
No!

As a PhD student, I received tons of "potential phd candidates" offers on my mail, merely because I had an institutional mail. For professors, this is way, way worse. Cold e-mailing with attachments is a bad idea.  It would end up on the spam/ignored folder.

Matter of fact, do not contact him yourself, ask your MS supervisor for an introduction e-mail, because coming from a known sender, it will have more chance of being read. Introductions are always better than cold calling...