The economy of Toronto is the largest contributor to the Canadian economy, at 20% of the national GDP, and an important economic hub of the world. Toronto is a commercial, distribution, financial and industrial centre. It is Canada's banking and stock exchange centre and is the country's primary wholesale and distribution point. Ontario's wealth of raw materials and hydroelectric power have made Toronto a primary centre of industry. The metropolitan area of Greater Toronto produces more than half of Canada's manufactured goods. The economy of Toronto has had a GDP growth rate of 2.4 percent annually since 2009, outpacing the national average. Toronto's population was 3.025 million people as of 2022, while the population of the Toronto census metropolitan area was 6.47 million during the same year.

Toronto is located on a crossroads dating back to aboriginal times with excellent harbours with many rivers. The economy grew based on the settlement of Ontario. During the late 19th century, Toronto became the centre of railways and the supplier of goods to Ontario. Its status as a political centre gave it some stability during periods of economic uncertainty. Toronto saw a large boom after World War II when immigrants, especially from war-decimated Europe, chose the area to settle. Manufacturing, notably automotive manufacturing, grew to supply the population growth.

Toronto grew at a faster rate than the other great centre of Canada at the time, Montreal, and surpassed it in the 1970s. Shipping by water was instrumental in Toronto's early growth, but this has diminished to the point where the harbour is lightly used by industry. The area around Pearson Airport, the country's busiest airport, has become one of the largest industrial areas.

Further growth in the Toronto area is often attributed to the rise of Quebec separatism, though the extent of its influence is still contested by some, who argue that its effect was exaggerated by the English media. During the 1970s, the Quebec Liberal Party and the Parti Québécois enacted a series of French-language laws, which were perceived as unfavourable towards English-language businesses (especially multinational corporations, whose markets extended far beyond Quebec's borders) and English-speaking Montrealers. Some of the former (including the Bank of Montreal) and a number of the latter subsequently relocated to Toronto, where French proficiency is not a necessity for business or employment.

Much of Toronto's manufacturing sector has moved to outlying suburbs in the Greater Toronto Area, seeking lower land costs and land for expansion. This is not a new trend; it has been present for over 100 years. Early suburbs, such as West Toronto, developed for industry and were later engulfed by the expansion of the City of Toronto. West Toronto once had a large stockyard, which has moved well north of the city. Much of the older industrial land has been converted into new residential neighbourhoods, supporting loft and condominium development and the industrial concerns have moved further away. The sector remains a large employer, employing 25,000 directly.

Toronto itself has diversified into service-based industries. It is the centre of the Anglophone media industry in Canada, the advertising industry, the entertainment industry, the fashion industry, the communication and technology industry, the pharmaceutical industry, the retail industry and the centre of the financial industry in Canada. The area is a large site of computer software development. Toronto has also become the site of many headquarters of companies, which have their primary activities elsewhere, such as mining and real estate, which need to stay close to the centre of finance. As Toronto developed, it has also developed its tourism industry, developing attractions such as the Toronto Eaton Centre, Rogers Centre, Scotiabank Arena, Roy Thomson Hall, Art Gallery of Ontario, Royal Ontario Museum, Ripley's Aquarium and most notably the CN Tower, though it is also a communications tower.

As the country’s commercial and financial hub and one of the largest financial centres in the world as per the British Global Financial Centres Index, Toronto hosts the Toronto Stock Exchange (TSX), the third largest stock exchange in the Americas by market capitalization and ninth in the world as of January 31, 2015. In the 2020 Global Financial Centres Index, Toronto was ranked as having the 31st most competitive financial center in the world (third in Canada after Vancouver and Montreal). The financial service sector, including banks and insurance companies, account for about 20% of Toronto's economy. Toronto was the first North American exchange to employ decimal pricing, and one of the first in the world to use a fully computerized system. The world's first exchange-traded fund (ETF) was listed in the exchange in 1990. The TSX is the world's largest exchange for the mining, oil and gas industry, the leader in cleantech listings, and is second in North America in the number of technology companies listed. Toronto is the fastest growing financial center in North America and the second largest in North America, after New York City and Chicago, with approximately 205,000 staff in the Canada's biggest banks and brokerages. In 2008, Forbes Magazine named Toronto the 10th most economically powerful city in the world, ahead of Madrid, Philadelphia and Mexico City.

The Financial District in Toronto centers on Bay Street, the equivalent to Wall Street in New York. The city hosts the headquarters of all five of Canada's largest banks, Royal Bank of Canada, Toronto-Dominion Bank, Scotiabank, Bank of Montreal and Canadian Imperial Bank of Commerce, and was ranked as the safest banking system in the world between 2007 and 2014 the World Economic Forum. Toronto's economy has seen a steady boom in growth thanks to a large number of corporations relocating their Canadian headquarters into the city, and Canada's growing cultural significance. Resulting in a number of companies setting up shop in Toronto.