Well let's bring in the Toronto Jew in on this one...

Centre St. Deli: excellent smoked meat (by Toronto standards), plus other deli fare. Not in city core though, in Thornhill well within walking distance of my house.

Moe Pancer Deli: very famous, good omelettes.

United Bakery: not a deli per se, but nevertheless yummy.

Shopsy's is meh.

Pickle Barrel is a Toronto institution and contains some Jewish qualities to it, although it's heading towards a Cheesecake Factory like direction.

But, the best deli in the world might be Montreal SMoked Meat, which the best is found at Schwartz's in Montreal.