Most passengers don’t plot routes on a map or reason in terms of geographic “direction.” They choose based on total elapsed travel time, number of stops, and what booking tools surface as the best option.
“Backtracking” is a geography concept, not a booking one. If AC can offer comparable or only modestly longer elapsed times by running tight banks at YYZ/YUL and relatively streamlined connections, those itineraries remain competitive in practice. Connection quality matters as much as distance: hub congestion, terminal changes, and long minimum connect times at some U.S. hubs can easily erase any theoretical advantage from a shorter great-circle route.
That’s why this shows up in real searches. If routings via Canada weren’t time-competitive, they simply wouldn’t ranked at the top. As I have shown earlier, AC also do offer competitive pricing vs US carriers. Airline pricing is not correlated with costs of delivering the service, they will offer discounts for connections to attract passengers, hence as the previous poster mentioned, flying BOS-YUL-FCO was cheaper than YUL-FCO.
I did not say that flights between the USA and Europe via AC's hubs were backtracking. I'm not sure why multiple people keep referencing fares on flights to Rome. I never used Europe as an example of where connecting in Canada makes no sense. I stated that it makes no sense on USA-Latin American routes and, for various reasons (local taxes, fuel and labour costs, airport fees, lack of direct competition) AC cannot or does not offer sufficiently low fares to overcome the inconvenience factor on U.S.-Latin American routes.
No one can seriously believe that a passenger from the U.S. Midwest or Northeast, wanting to fly to (for example) Guatemala City, is going to choose to connect on AC via YUL when there are plenty of flights available via Houston, Miami and Atlanta at lower fares and with more choice. Plus, connecting in YUL means a longer flight on the YUL-GUA portion in comparison with a shorter flight, say, IAH-GUA. The flight from Montreal is timed at 5h55 when the IAH-GUA flight is only three and a half.