Honestly, even though most of the rest of the country hates us, I would say Toronto! We have the TTC, which makes it easy to get anywhere, and there are family day passes available. If you want culture, we've got it all: museums with activities for kids (ROM, AGO, Bata Shoe Museum, etc.), the zoo, the Science Centre, Harbourfront Centre, the CNE which regularly hosts family-friendly events, the CN Tower, Black Creek Pioneer Village, Ontario Place, not to mention lots of parks and natural attractions: High Park, the beaches, sugar bushes and farms that offer an assortment of activities for families including apple picking, hay rides, petting zoos, etc.
Toronto also has a wide variety of accomodations, including chain hotels and small B&Bs to suit most budgets and there are local businesses that can rent you baby gear (cribs, car seats, etc.) for your stay at a great price. For example, check out: http://www.weetravel.ca/index.php
Perhaps I'm biased because this is where we live, but we never run out of activities to do with the family!