An ATC clearance or instruction is predicated on known traffic only. Therefore, when a pilot is proceeding in accordance with a clearance or instruction
Why this is the answer
Under CAR 602.31 a clearance is based only on known traffic, so accepting one does not relieve the PIC of the see-and-avoid duty. The correct reading is the 'not relieved' phrasing — you remain responsible for watching for and avoiding other aircraft.
Reference
CARs 602.31 – Compliance with Air Traffic Control Instructions and Clearances TC AIM-RAC – ATC Clearances, Instructions and Information
Question reproduced verbatim from Transport Canada’s PSTAR Study and Reference Guide (TP 11919E). The answer key is Transport Canada’s; the explanation is ours.
A study aid — not a substitute for the official guide, the CARs, or your instructor.