In the experience I mentioned above, I don't think the hotel assignments were differentiated based on status. ... So, I think the agent was saving the Fairmonts, perhaps in the event a SE showed up, and then when none did, just gave them out near the end.
I've had several IRROPS over the past few years in YYZ - probably around 6-7 in the last two years. Every time I'd had a hotel provided to me, but perhaps as an SE.
I've been to Sheraton a few times, Travelodge, Choice, etc., depending on the scope of the IRROPS. Most recently was February, where I was given a hotel choice 14km away.
I asked instead for Sheraton, but was told AC hadn't used Sheraton in several months (I suppose the price/contract expired).
The connections desk did call around, prefixing their conversations that they had a request from an SE, but no luck. Like jbb I took the card for a Quality Inn, but decided to book my own SPG hotel and use my trip delay insurance. I'd been to that hotel before... and had already been worried about bed bugs once.