Were you given a reason for the downgrade? Under Canadian law the operating carrier is also responsible for a refund. According to the COC you are allowed a 50% refund and according to Canadian law you are entitled to the fare difference, which ever is higher.

It could have been an aircraft change where less seats are available then it's understandable. Highly unlikely it's a FAM situation. These were probably not AC employees but lazy contract or US based carrier employees. I have been in one downgrade situation whith AC. This was at YUL and not only were they profusely apologize but rebooking me via another city including connecting J class on a non-alliance airline.

Just curious also when you walked through J class were there any airline employees sitting in those seats.