But I'd say this is exactly why you pay that $40 a year or whatever. Sometimes the airline doesn't deal with it. Being as though this was originally a weather case I could see AC just standing on that reason.
That being said, come on, was EVERY flight from YYZ overbooked? Couldn't have gotten them to Winnipeg, Regina, Minneapolis, Billings, Calgary...nothing? Hell AC could pay them for a rental car, or a bus or something, just get them home then sort out compensation later if you truly can't get them to Saskatoon.