As I'm sure you have already Isha, I have searched for news items related to any problems encountered by trans* persons flying in Canada. Plenty of items right after the policy came into existence (and stories about a topless TG incident on Westjet) but nothing else. Surly there have been many trans* flying in the last couple of years?
The other interesting fact about this whole thing is ref "5.2 (1) (c) the passenger does not appear to be of the gender indicated on the identification he or she presents". Funny, both my drivers licence and passport indicate SEX not GENDER. So, technically, by the letter of the policy, it can't be done.
Yep, who ever wrote this needs to be educated, there is a difference.