This is an award ticket.

Did SEL-NYC-YYZ price out cheaper than SEL-NYC alone when booked? Does it now?

Even if the OP were not a U.S. citizen and checked a bag, that would not be an issue. He will be admitted to the U.S. when he passes through Immigration (as all connecting passengers in the U.S. must do), and he would have to claim any checked bag for Customs inspection. (AFAIK, neither EWR nor JFK is one of the few U.S. airports which offers international-to-international through-checking of baggage which avoids Customs inspection.)

I'm not competent to address what AC's policy is about skip-lagging on award tickets.