Spenda, you're bang on about Canadians needing to invest more in themselves. Unfortunately the Liberals have spent three generations cultivating an inferiority complex that is now so deeply ingrained in our national psyche that we won't do anything without government involvement. The web of favours, subsidies and preferential treatment for investors with friends in the right places is so tangled that nothing will ever be resolved unless we ditch everything and start from scratch.
The preferential treatment for TCA went far beyond locking CP out of the Atlantic routes. Back in the 20s and 30s there were several privately-owned regional carriers, the most successful of which was Canadian Airways based in northern Ontario (the Soo, I think). The owner wanted to get licenced as a national carrier, but Ottawa rejected his proposal then used taxpayer money to form TCA. Once TCA started operating with a Liberal bagman at the helm, Ottawa systematically barred Canadian Airways from its best routes until that firm went bankrupt. CP Air did moderately better because its parent company, the railway, had full-time lobbyists who were adept at topping up party coffers. CP got a few bones thrown its way, and kept fairly quiet about the regulators because they, like TCA, wanted Ottawa to keep Max Ward out of the picture. Even as recently as the 1970s CP was restricted by the regulators to just one transcontinental flight per day, but that was better than Wardair, which had some good routes but was required by law to book passengers a minimum of 60 days in advance. Also, remember that ubiquitous disclamer "fares subject to government approval" on every seat sale ad in the 70s?
BTW LGW wasn't the only Wardair jewel- their reputation for service was legendary, yet another asset squandered by CP management.
Even though I'm an evil Torontonian I can understand why Calgarians are frustrated- the pattern of that city being screwed over by Ottawa for refusing to vote Liberal is too obvious to ignore. I remember reading about the CBC operation there- apparently CBC Calgary was drawing large audiences (a rarity for the CBC) and making money while CBC Edmonton was a money pit that was ignored by viewers. When the CBC had a round of budget cuts they closed Calgary because Edmonton elected a couple of Liberal MPs. Let's hope Chrétien doesn't get vindictive enough to bring in another NEP.