I think Canada would do well to look at what has happened in Australia (as mentioned earlier in the thread). Canada is an "end of the line" market, as is Oz. Although there is some 'destination' traffic (pure tourists), the vast majority of international pax are citizens heading out for tourism and returning, or VFRs.
In oz, there are two distinct groups who won/lost. There is no doubt that the appearance of ME carriers has given ozzies much more choice, more direct flight options (or at least less stops), and put pricing pressure on fares. There can be no doubt that there ARE MORE PEOPLE FLYING because of their appearance. Even though QF has remained profitable, it is a shadow of it's former self. It certainly has not GROWN- ie the pie has gotten bigger, but QF's share is smaller. But the prospects for a young person to get a flying a job? The T&Cs of pilots across the industry? Allowing open slather has ramifications for those IN THE INDUSTRY, and how that affects the COUNTRY as a whole, is IMHO, yet to be seen (fully). It really is globalisation in action.
It would certainly have been interesting to see what would've happened if QF had've aggressively tried to retain market share against the likes of EK with it's superior network, cost base (due to many things already mentioned; it would be a very interesting analysis if the people at AC put forward their own study which quantified the competitive advantaged gained when a foreign carrier does not have the same minimum wages/FTLs/unionised workforce {with all the inherent advantages/disadvantages/costs that brings}) etc. etc.
Very interesting indeed.