Westjet may very well change their strategy slightly, but I doubt we would see anything significantly change. I don't think Air Canada will go under, but the possibility is definitely there.
In the event of Air Canada liquidating, you will see current players filling in the void. Westjet will expand further into domestic service. You will see HMY and Conquest expanding as well, offering more service than currently available with Westjet, Canjet and Jetsgo. HMY and Conquest (operated by Skyservice) have full service on board, much like Air Canada, and will likely get a good following. Air Transat can also provide full service on domestic routes. In terms of international service, you'll see foreign airlines applying for more frequencies, but I don't think any 5th freedom rights will be necessary. Between Air Transat and Skyservice, you'll have some international capacity. I can also see Jetsgo going international on short notice, and Michel Leblanc is one to take the risk and hastily introduce new international service with different aircraft. (MD
-11 or B767 maybe?). Anyways, these are just thoughts, and they could be way off! But don't expect Westjet to alone pick up the slack.
"it's kind of like an Airbus, it's an engineering marvel, but there's no sense of passion" -- J. Clarkson re: Coxster