There are several in the Toronto area. One of the more prominent ones is located on Wellington, just west of Spadina and is operated by AOV.
There used to be a huge operation on Bay St., right in the heart of the financial district but that's been wound down. The firm is more into content distribution and turn-key websites today.
Don't know for certain whether Python is still producing content but they're based here as well. Chances are, you'll find more studios in Vancouver and Montreal than you would Toronto.
Paul is correct in that most of the lower-end gonzo stuff is shot on location. Even the higher-end softcore stuff is done this way, most typically at 4 or 5 star hotels.