Wiz- that is actually my point. That the simple arguement that the they have a 'right' to choose from any carrier they want is unwarrented. The costs in job losses elsewhere, lost income elsewhere, lost economic activity elsewhere in the economy overshadows what little gain the country receives.
Consumer choice is one tiny variable in the equation. Since EK is priced similarly to the competition it negates the cost savings arguement as well. If a pax is going to make a one stop they can take dozens of other options.
So EK currently flies lots of subcontinent passengers into Canada. Those passengers will arrive one way or another. Ek has a deep presence in India and so the choice of Indians is EK because, if they come from a smaller centre, they might have had to make 2 stops (instead of 1) to reach Canada before EK came along.
Now the arguement comes full circle--again, I don't think Canada's aviation and economic policy should be dependant on making sure one country has excellent access to Canada (ie. only has 1 stop vs 2 stops)--and it has nothing to do with skin colour. It makes NO economic sense to kill another part of the economy to allow EK into the market.
Canada is not protectionist. It has open skies agreements with the US, Europe etc. No country signs open skies or other free trade agreements unless both parties benefit. So, again, Canada receives a slight increase in choice while losing significantly on the income that flows directly into Canada via Canadian airlines and their partners. The choice the government is making is clear.
As for Australia, they may make different choices. Being more isolated as a country they may have decided that the increased choices that EK offers is valuable and, I would guess, that if that is the arguement for them it has less to do with just passengers then it does with insuring economic activity via cargo and the ability of business to link to the outside world. But Canada and Australia are not teh same and have different needs.