Fail to see how this would be a disaster for Air Canada. Aren't most bilateral agreements signed with European countires (other than the UK) on a one-for-one basis so that Canada nominates one carrier and the other country nominates one?

Deregulation would simply increase competition for AC (for instance, both Spanair AND Iberia could fly to Canada from Spain, instead of just Spanair). And, since EU is going towards deregulation within, it could also mean Air France flying MAD-YYZ nonstop as well.

If Canada remains out of the agreement, there's nothing that stops AC from transporting passengers between the EU and US via Canada, as it does now. So what's such a disaster for AC here?