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.