I wonder why it isn't. I'm in Montreal, and startups are definitely in the air. The advantages Montreal has I can think of are:

* It's very cheap; good for getting started * A VERY high number of students per capita. At least five major universities, plus many CEGEPs * It's not near Waterloo. I imagine much Toronto talents gets sucked down to Kitchner-Waterloo. * It's the center for French talent. English talent in Toronto has other places to go, if it wants.