Why Toronto is Toronto

It's Canada's largest and most important city, but why?

Photo by Conor Samuel on Unsplash

Toronto is Canada’s largest city, its financial powerhouse, and one of the most multicultural urban areas in the world. But if you look at it on a map, it’s kind of in a weird area. Especially to be Canada’s largest and most prominent city. If you were to use the United States as an example for where major cities would be located (such as New York City, Boston or Philadelphia), you might rightfully think that Halifax or even Quebec City would be the dominant city just given the proximity to the ocean. But they’re not! They’re quite small. So how did Toronto, far inland and away from major trading routes, become Canada’s primary metropolis?

It all starts with geography! Canada, of course, is very cold and inhospitable. But not all of Canada is the same. Toronto, which sits on the northwestern shore of Lake Ontario, one of the five Great Lakes, has a relatively moderate climate. Nothing like, say, California, but certainly more so than you would think. And this is primarily because of the Great Lakes. While Toronto is firmly within a continental climate (which means there can be large swings in temperatures between summer and winter), the presence of the Great Lakes, moderated the temperature much more so than, say Calgary which is frigid! And just ask any of Canada’s Atlantic provinces what they think about their weather and you might understand why a cold, but moderate climate in Toronto would still be preferable.

But more than the climate, Lake Ontario, by way of the St Lawrence River, allowed easy access to the interior of North America. The St Lawrence River, of course, being one of the largest rivers in all of North America, had a profound impact on how Canada was settled. In the early days of colonization, Toronto’s location made it a strategic trading hub, first for Indigenous peoples, then for French and British fur traders, and eventually for railways and shipping routes that would crisscross the growing Canadian territory. Its port and later its rail infrastructure allowed it to move goods across the continent and connect with other Canadian ports and key American cities, particularly New York, Chicago, and Detroit.

So, despite its unusual location, the geography of Toronto proved to be well worth the population the city has today. But there are also historic reasons as well.

During the American Revolution, many British loyalists fled north and settled in what would become Ontario. And, when they arrived, the British government gave them land as payment for their loyalty to the crown. This initial influx gave rise to a population base more aligned with British institutions and customs, setting the stage for Toronto to become a stable administrative center for the British. This would contrast with Montreal which had a strong French-Catholic identity and would later struggle with political unrest tied to Quebec sovereignty movements. Toronto offered a more neutral, less contentious base for business and governance and so, was prioritized extensively by the British during the early periods of Canadian development.

Speaking of the economy, Toronto benefited from two crucial trends over the decades. First, as Canada's economy industrialized through the 1800s and early 1900s, it developed into a manufacturing and banking center. While Montreal was the country's financial heart for a long time, Toronto gradually overtook it. A key moment came in the 1970s when political uncertainty in Quebec caused several banks and corporate headquarters to relocate from Montreal to Toronto. The Bank of Montreal, for example, is no longer headquartered in Montreal, it’s headquartered in Toronto (though it maintains a large administrative center in Montreal). That shift effectively made Toronto the financial capital of the country as well.

Immigration, of course, also supercharged the city’s growth in the post-war era. After 1945, Canada liberalized its immigration policies and began welcoming people from all over the world. Toronto, with its jobs, services, and expanding suburbs, became the prime destination. What was once a relatively homogenous Anglo-Protestant city transformed into one of the most diverse in the world, with over half its population born outside of Canada. This multiculturalism not only enriched the city's culture but also expanded its global business connections and workforce.

And so, we get to today. In 2025 Toronto has become more than just Canada’s largest city by population, it’s also become its most influential. Home to the Toronto Stock Exchange, the Big Five banks (Royal Bank of Canada, Toronto-Dominion Bank, the Bank of Montreal, the Canadian Imperial Bank of Commerce, and the Bank of Nova Scotia), major media outlets, top universities, and a growing tech sector, it now shapes national conversations on politics, culture, and economics. In many ways, it acts more like a global city than just a Canadian one.

Toronto, of course, didn’t become Canada’s major city overnight. It rose slowly and often quietly, helped by its geography, stability, and adaptability. But over time, those advantages compounded, allowing Toronto to outgrow its rivals and take its place as the center of modern Canada. And, if I had to hedge my bets, I’d say it’ll stay that way for a long time.