I would imagine the region is so cold that time of year it would make flights into Montreal cheaper. $500 does sound like a lot. Maybe there's something going on in the city for the days you're pricing. Have you tried checking prices for travel which has you staying through a Saturday? That would typically provide the best rates.
Also, booking so far in advance is not your best bet - better to start checking about 3-4 weeks prior and check daily (delete your cookies though) for Aircanada sign up for seat sale events (they will send you an email with details of sale dates)
What accounts for the higher fares? Just look at the base fare and add to it immigration and security fees on both sides of the border, airport improvement fees at Trudeau, GST, PST, fuel surcharges, and some other obscure taxes.