YYC-YYZ and back is less than $600 all in on tango fares assuming you book a week or two in advance, so let's not exaggerate. The base fare is mostly attributable to high demand and the duopoly that exists on the route, but keep in mind you pay $30 for the lovely new terminal in Calgary, you pay $25 to Toronto, an airport that has some of the highest landing fees in the world, you pay for security, and you pay tax. This represents $100 of your round-trip airfare that's out of AC's hands regardless of their base airfare.
Then you help pay for gas (not cheap), and you help pay for the very high Canadian air traffic control user fees, which are very very not cheap. The airline get dinged for every mile flown in Canadian airspace, and then further dinged just to have their plane in the vicinity of Toronto which is the busiest airspace in Canada.
Just some side info, here's a display of what Toronto - Vancouver flights do sometimes, not only for favourable winds, but because sometimes flying longer over less expensive airspace can end up saving you money. AC's dispatch in Toronto has powerful software (taken from German airline Lufthansa) that takes it all into consideration and picks the most optimal route. Whatever.
Do a dummy booking on something like Vancouver - Honolulu, you'll see that despite flying 900 miles further, the base fare is $100 less... and I reckon that is almost entirely attributable to the aforementioned duopoly and high demand, more specifically the difference in
elasticity of demand on the two routes. People are more likely to sideline their Hawaii plans versus some necessary family or business travel to the east coast via Toronto. It's no surprise, but I've been told that Air Canada prints money on Calgary/Edmonton - Toronto to the point that one of the afternoon Edmonton - Toronto flights is (or was at one point) the most profitable domestic leg in their system. Anyway, going to Hawaii you pay less for ATC fees because very little of the flight is in expensive Canadian airspace, but you do pay US tax and customs/immigration fee which negate the advantage of only having to pay Vancouver's $20 improvement fee and not that of an additional Canadian airport.
I don't expect this info to make it any easier to pay an arm and a leg to get to Toronto, and yes AC/WJ are screwing you, but maybe this will shed some light on the method in which they're screwing you and where your money is going.
So... the comparison to the US, who include in the base fare whatever fuel surcharge they want to add:
United dummy booking on round-trip Los Angeles - Chicago (similar length to YYC-YYZ)
Base fare: $153.49 USD x2
Taxes/fees - $51.22:
Federal ticket tax of 7.5%: $23.02
9/11 Security fee: $11.20
Facility Charge: $9.00 (compare to outrageous Canadian AIF's above)
US Flight Segment Tax: $8.00 (effectively your ATC fees, pretty much nothing)
Total: $358.20 USD = $439.96 CAD
So there you see US flyers get it easy with fees and, there's competition as well. I count six airlines - American, United, Virgin, Spirit, Southwest, and Frontier flying LAX/SNA/ONT - ORD/MDW. Again for comparison, a dummy booking SFO-MIA (50% longer flight distance, and is the only airline on the route) is $590 USD ($724 CAD) round-trip, of which $67 USD is fees.