Historically, a lot of the biggest cities have been seaports where immigrants settle down (New York City, Sydney, Montreal, Lisbon) and they either already were, or subsequently became the largest cities in their respective countries. So why is a city like Toronto which borders on a lake, the largest city?
It is a Seaport. Toronto is connected to through lakes, rivers and canals to the Atlantic Ocean.
Toronto is also the premiere city in the largest piece of extremely fertile land in Canada. Basically the whole of Southern Ontario is some of the top farmland in Canada and as such it became the most densely populated area in Canada.
Toronto and the "Golden Horseshoe", which is basically a megacity of suburbs that wraps around Lake Ontario has also been the hub of manufacturing for Canada. The auto industry is the premiere manufacturing industry. The trade agreement known as the Auto-Pact, signed in 1965 with the USA, was a hugely important deal for Canada and the United States. It allowed the Great Lakes region to use all of its resources to churn out cars as quickly and cheaply as possible. Ore is mined, smelted and manufactured into parts at various places around the lakes, and it is shipped tariff-free to wherever it is needed. Many of these important manufacturing sites are in Toronto and the suburbs. NAFTA expanded this tariff-free Great Lakes concept to other industries as well.
Prior to the 1970s, Montreal was the largest city as well as the business and banking capital of Canada. But things started changing in Quebec. Quebec was a French populace but they were in some ways heavily influenced and dominated by Anglo-Canadian elites and businesses. An event took place known as the Quiet Revolution, where French speakers took back the province and made French the preeminent language of business and government through a bunch of language laws. This caused many businesses which were ran by Anglo-Canadians to move their corporate headquarters to Toronto. In the 1970s a lot of Anglo-Canadian elites and their businesses left Montreal for Toronto/Ontario permanently. Toronto's growth outpaces Montreal and I believe it was sometime in the early-mid 80s Toronto surpassed Montreal in size, and as the most important city in Canada.