I live in the west end of Toronto and someone on my street just bought one, as it has been parked near my house for the last couple of weeks.
I'd definitely drive one around the "old" city of Toronto, but not sure if I would take it on the expressways. It might feel like you are driving in a cereal box.
I've been thinking about getting a more fuel efficient vehicle (as a 2nd card) for next year (I have a Venture van) but as my usual commute is 40km up the 400 every day the Smart Car would be a little too small. Maybe one of the sportier Civics or a Mini.....