Why Airbus A220 if A320 already exists?
The A320-318/319 or the improved A320neo-319 share the market area around 107 - 160 passengers with the CSeries (now A220), two main differences are:


The CSeries is designed generally for carrying less passengers than the basic A320-family. The fuselage of the A320-family is stretchted or compressed, exemption is the A320-318, which has also smaller wings, but at some point strechting/compressing the fuselage becomes inefficient.
The CSeries is an entirley new plane, while the A320neo seems to be more some kind of improvment with new engines and some(?) modifications to the airframe.


Basically, the airframe, fuselage and engines should fit together, to make an efficient plane. The CSeries should be therefore more efficient with small numbers of passengers. The A320-318 will be not available as neo and the A320neo-319 seems to be market for special long-distance and hot-and-high (engines produce more thrust and consume more fuel) situations.