Thanks. Our Tech team says we have to keep the /ca folder for now due to some legacy dependency within the CMS and its URL structure, a pretty massive effort to fix. However, I agree we should NOT be using a 302 temp redirect, big no-no. I'll work with making that a 301 ASAP, thanks for bringing to my attention.
Contrary to what I said earlier, I just learned that the travelocity.ca domain has not been verified in GWT yet therefore we haven't told Google to explicitly target Canada (.ca) users.
Once we get the geotargeting set to Canada for travelocity.ca, I think this will be fixed. I'll update this thread as soon as I know the outcome.