The quote you provide is not from the "government's own review". Rather, it's a quote from a CAPA submission to the review
An actual quote from the actual review is the following:
According to Transport Canada, only 3 percent of existing international traffic falls under agreements that pose practical constraints on carriers’ business plans. Much of that business is with the increasingly important global hubs of Turkey, Singapore, the United Arab Emirates, and Qatar. Canada also does not have fully open agreements with important trade partners, such as China, India, and Mexico (though the limits on the agreements may not pose practical constraints on carriers’ current business plans). Agreements are likely to limit traffic either because the Government Canada has determined that there are risks due to safety, security or unfair competition, or Canada has proposed a more liberal air services agreement, but the offer has been declined by the other country.
Canada has resisted increasing access to fast growing competitors in Turkey and the Gulf on the basis of a lack of demand for direct travel. However, Canada has pursued open agreements in other equivalently-sized markets when Canadian carriers have expressed commercial interests. In the former cases, Canada responded to market growth by granting increased access in increments of 1 or 2 weekly flights at a time. Some industry observers believe such moves may have been calculated to make expansion into the market more awkward and costly.
So rather than the government's review agreeing with you it merely acknowledges that "some industry observers" agree with you. Hardly a ringing endorsement of your position.
The report has endorsed it by including it ad verbatim as the basis for his recommendations in the report (volume 1), but I see your point and it's fair. So let's focus on the reports own words:
"The world is moving towards an open market for air services. Canada’s approach has outlived its usefulness and now renders our air services less competitive, less trade-friendly, and more costly than those of our global competitors.
Maintaining the status quo presents the risk of continued decline in market share and a weakened economy, due to the higher costs of air travel that follow from a lack of competition"
And then there's the recommendations:
* a minimum allowance of seven ights per week (7/7 daily service) for each of the air carriers designated by all new and existing air services agreements with any safe and secure partner;
* all subsequent increases in air access in increments of at least seven ights per week, per designated air carrier;
* consider agreements that incorporate automatic planned increases in capacity to allow for stimulation of demand, with established timelines for moving towards “open skies;” https://www.tc.gc.ca/eng/ctareview2014/CTAR_Vol1_EN.pdf
Recommendation 1 and 2, as I'm sure you'll have noticed, directly address the issue raised by "some industry observers" (less than daily frequencies). Evidently the Government's own review shares/endorses those views to the extent that it uses them as the basis for its recommendation.
Not exactly fake news, is it? Certainly not compared to AC's glitzy webpage on what Australian policies have done to QF. Pity they took it down.