Actually it's not that coffee is bad in Toronto but there is a clear hierarchy of quality that is NOT correlated with cost.
Also note a lot of places (esp restaurants) that sell 'coffee' also sell espresso but they don't always advertise it, you have to ask.
From bad to better:
Dunkin' Donuts: absolute garbage undrinkable swill that calling it 'dishwater' is a compliment, most dishwater tastes better.
Motel breakfast buffets: dunkin' donuts exists to make these places look good.
Breakfast places/diners: usually pretty bad but for breakfast not so terrible, sometimes have espresso.
Tim Horton's: barely acceptable coffee substitute, only problem is that people think it's good when it most certainly is not.
Timothy's/Second Cup: better than Tim Horton's, but not by a lot. Usually have espresso. Too many flavoured coffee-drinks. Overpriced.
Starbucks: only thing of note here is that Starbucks in Canada is quite a lot better than Starbucks in USA.
Local hipster coffee joints: very good, although can be overpriced. Prices good if you stick to plain espresso.
Local italian places that seem to have no customers and may do nothing at all except let old italian guys hang out, launder money and sell coffee: probably the best, although some variation. Espresso too italian (very short/very bitter ask for the lungo instead).
(Local portuguese / brazilian / south american places pretty close to Italian except a bit more variable quality and usually have some obvious business and clients, i.e. not just fronts for money laundering).
There are a lot of places that are hard to classify/vary too much. French-style pastry places, random coffee shops/pastry places - can be great or terrible, just depends. Vietnamese places have great iced coffee, some of them do espresso properly.
Note my totally arbirtary and subjective ranking does not hold in other parts of the country (especially montreal/quebec). (Although arbitrary and subjective I am the only person who knows how coffee is supposed to taste and should be considered authoritative)
Further from urban centres, the worst. Contrary to expectations of French stuff being tastier, coffee in cheap places in montreal and almost all of the rest of quebec can be amongst the worst in the country (montreal pretty serious about coffee though). And occasionally you run into places in small towns in Ontario, even fairly far north, that have unexpectedly good coffee.