You won't find US airlines offering fares between 2 Canadian cities because of US-Canada agreements. (For the same reason, you won't find Air Canada offereing fares between US cities with connections in Toronto.)

However, because Canada decided to put most of their cities on/near the U.S. border, you have some other options. For example, if instead of flying between Toronto and Vancouver, you flew between Buffalo and Seattle, you are likely to find more attractive fares. Travelocity, for example, shows a fare of US$273 for a BUF-SEA round-trip, which is about 60-70% of the AC price you quoted.

Travelocity also shows an AC fare YYZ-YVR of -- you need seats in the 'L' bucket, travel Mo/Tu/We/Sa, stay over Sat nite, and travel between Jun 27 and Sep 3.