I think it depends on what you want to do. This is a great place for film / video. It's getting better for games, and of course there's financial services. There also seem to be a bunch of mobile companies here, too.

There's a very healthy ecology of small software companies, and a lot of web companies. There's a bit of defence and aerospace around the airport, but I think Montreal and Ottawa are bigger than Toronto, for that.

Kitchener's not too far away, and they're a major powerhouse with U of Waterloo, and RIM.

ATI just got acquired by AMD, and Alias by Autodesk, so there should be some newly minted angel investors around. I haven't sought financing, so I don't know what that's like. Having been through some private-equity as an employee, the funding definitely seems to be out there.

I think we're building a pretty good tradition, but it's going to take time. The seeds are there though, looking back over the last 20 years (god, I'm getting old!). There's nothing like the unholy Stanford-VC-startup triad yet.

So, I'm not really sure what to say. It's probably harder to get funded here than in CA, and you obviously won't get the same buzz as being YC-funded. On the other hand, if you want to work at a startup or small, hip shop then there're lots of places here.

EDIT If I ever move out of my home-office, I'm going to try to set up next to the U of T comp sci and engineering buildings. That's the nice thing about a down-town campus.