That's not why SQ bailed. SQ was annoyed at the AC success on SIN-DEL-LHR which was eating SQ traffic so the SIN govt (SQ's mouthpiece) suspended the bilateral. SQ is lauded for being worldclass....but it seems that it cannot operate in a truly free market, nor does it support 5th freedoms of OTHER carriers into SIN.
Not quite, it is a long and complicated story, but here is the gist of it.
The first Canada-Singapore bilateral was signed in early 80s. Under this bilateral, AC
could fly to SIN
via any intermediate point. Restrictions were placed on which points SQ
could fly through and on the nature of services to Canada (the list of restrictions is long, I won't bother to discuss them here). The Civil Aviation Authority of Singapore (CAAS) signed this agreement because it wanted to get AC
and to promote SIN
as a hub, even if it meant putting SQ
at a disadvantage.
With this bilateral, AC
v.v. with full 5th freedoms in 1985. SQ
wanted to commence services to Canada, but because of these restrictions they could not start a viable service to Canada.
thus protested and CAAS canceled the bilateral. The main issue was not AC
's 5th freedoms, but rather the restrrictions placed on SQ
. Negotiations started, and SQ
won several concessions from Transport Canada. With this, a new bilateral was signed, and SQ
pulled out of SIN
in 1990. After AC
pulled out, SQ
vv in 1991. After this service commenced, AC
protested to Transport Canada about their loss of traffic on Canada-Europe, and Transport Canada canceled the bilateral. AC
's main objection was that SQ
was allowed to sell a significant number of seats to/from Europe, thus affecting their market share.
This time, negotiations were unsuccessful, and SQ
withdrew from YYZ
in 1992. The services to YVR
have continued till today, but under a "special license" in the absence of a formal bilateral.
There is a lot more to it - these are just the skeletal facts behind the dispute.