SCL/GRU/GIG-YYZ arrives in the morning so there is 10+ hour wait until the European flights depart. European flights arrive in the afternoon at YYZ, and South American flights departs close to midnight, which means 5+ hour connections. Not competitive vs connecting via CDG/MAD, plus another friction is many South American travelers would need to apply for transit visa for Canada.
Leisure destinations tend to have morning departures from YYZ and late evening arrivals that also don't line up with European connections. There are a few destinations like SJO/LIM/BOG where reasonable connections can be made.
I never said that Latin America-Europe connections were the ONLY reason or even the MAJOR reason for AC's plethora of flights to South America. I said this traffic is PART of it. Given that AC has significantly expanded its services in recent years (such as adding YUL-GRU, restoring YYZ-GIG and adding service from YUL to both LIM and UIO when in the past both were served only from YYZ) there is clearly significant demand beyond simple O&D. And the fact that geographically it makes little sense for traffic between the U.S. and Latin America to connect in Canada, some of the additional passenger volume for AC's Latin American routes is most certainly to/from Europe.
Also don't overlook the fact that there is a significant desire among many travelers to avoid U.S.transit, though to be fair this long predated the Trump administration. Also AC does seem to price its itineraries fairly competitively in comparison with both European and U.S. carriers. So price may be a factor for international travelers making Latin America-Europe connections in YYZ or YUL.