There is no shortage of competition coming into the Canadian market. The Canadian government's Blue Skies policy clearly favors the creation of more point to point services over connections via city-state hubs like Dubai and Singapore. Turkish has started flights to Istanbul, Egyptair is starting flights to Cairo, Hainan is starting flight Beijing, Cathay increasing YYZ-HKG from 12 to 14 flights a week next summer, Qatar now has the right to serve Toronto-Doha, Sri Lankan seems likely based on recent news from Colombo. The government routinely agrees - with Air Canada's concurrence - to allow PK extra, ex-bilateral frequencies.
There is plenty of competition, and the number of carriers in the Toronto continues to grow by several new entrants annually. What the government does disagree with is large scale capacity dumping by city-state carriers like EK which may not only impact AC, but also impacts the ability of these new entrants offering point to point to sustain profitable operations. From a total economic perspective, a large increase in point to point services generates new trade links and more direct cargo routings, and is preferable to Canada's economic development than allowing the Wal-Mart of aviation to dump capacity here.