Random observations:

1. People are confusing several different techniques:

Hidden city ticketing - Fare on YVR-BDL is less than YVR-PHL. Book YVR-PHL-BDL, and get off in PHL. Do not get on the connecting flight. Doesn't work if you have checked luggage.

Throwaway ticketing - One way fare is more expensive than return fare, so purchase return and "throw away" the return portion.

Back to back ticketing - That's what has happened here. Short stay is expensive, so book a longer stay, then book a reverse return flight.

2. Either this is a random, one-off fluke, or AC/AP have implemented software to detect this activity, apparently detecting it after the fact. According to AC's website, they flew over 31 million passengers in 2007 or about 85,000 people per day. If you were to take each of those 85,000 people and cross-reference them with the half million other passenger flights to occur in the following 6 days, it's simply not possible do it manually, even if every single AC and AP employee was involved. However, coding an application to do this would not be rocket appliance.

3. [MontyPython]"Ethics" don't enter into it.[/MontyPython] Airlines, including Air Canada are the epitome of unethical behaviour. They claim you've entered into contract when you ticket, that subjects you to all sorts of obligations. However, they have no compunction about cancelling, changing, or otherwise screwing around with the so-called contract if it's more convenient for them. They'll even resell your seat. As I've advised others previously, unless you're violating a law, there is essentially nothing about ticketing and air travel that should be considered unethical. Besides, for almost everyone ticket limitation, there is an effective work around.

4. If you are flying the same route on a regular basis but minimum stay (Saturday) requirements affect you, you simply need to do an "end run" around the restriction. If you have to fly YVR-FRA every Monday and return every Friday (for illustration), you'd likely bump up against this restriction. The solution is to get yourself to FRA however you can, and then start purchasing FRA-YVR-FRA, departing Friday, staying over Saturday, and returning Monday. This technique will work in most circumstances.

Alternatively, you can do nested ticketing, which in most cases is completely legal. Instead of flying back to YVR the OP could have flown back to SEA instead. No longer back to back.

5. Airlines, including Air Canada, would never take this to court and risk having their contractual verbage ruled against. They only reason they are able to exert any pressure is because they have in their possession something "belonging" to the other party. In the case of travel agents they can withhold payments owing. For passengers (most passengers, anyway) they hold the passengers' FF points and status. So until the airline acts on this alleged violation of a condition of carriage that somehow harms an individual, and that individual has both the resources and desire to fight the case in court, these situation will not be tested in the courts.

6. Every court case that ever happened involved two or more lawyers claiming that the other lawyer was wrong. And in most cases, the court proves that. So until tested in a court, any statements made, even by lawyers, are strictly conjecture.

7. The actual words that allegedly prohibit this kind of activity are buried so deeply that it seems unlikely any judge or jury would give them any weight.

8. Even if you follow the ticket rules to the letter, Air Canada will still take an accusatory tone. Back in the days of the Mexican Hat Dance (MHD - do a search) we fastideously followed each and every requirement. Yet the airline still declared, in the national press no less, that we were "abusing" the tariffs. Moreover, even though we mostly were ticketing on Air Canada tickets, AC "blamed" a so-called loop-hole in Mexicana's fare rules. (See http://www.theglobeandmail.com/life/...article529513/ )

9. A couple of years ago, Air Canada had cross country meetings with Super Elites, where they effectively promised to "kiss and make up". Then in short order sucker-punched us not once, not twice, but three times in quick succession. At this point, I'm not prepared to believe anything the airline says, and won't be surprised by any action they take.

10. As others have noted, the tone of the letter seems inappropriate. Even if what they say is true, once this letter "gets out" in the wild and finds its way into the media (and it will, eventually, if it keeps up) Air Canada will suffer yet another black eye (and of course they still won't have a clue as to why they are one of the most hated businesses in the country.)

11. Finally, here is an appropriate response the OP may wish to utilize:

lawyer's response