My spouse is Chinese-Canadian, so we’re up in Toronto pretty often. The following advice is all from my experience, YMMV.
If you want some Canadian cash, exchange it at the duty free shop right before you cross the border. if you are crossing at the rainbow bridge I believe there is now a dedicated exchange “shack” on the Canadian side of the bridge now that the folks at duty free will tell you to go. The rates at duty free / exchange shack are generally better than what you’ll get at an ATM.
As far as restaurants (and mostly Chinese ones) taking debit only, In my experience this is only a problem if they are actually Interac-only POS devices. Interac is the Canadian inter-bank debit network. If it doesn’t say Interac-only, your Visa Debit or MC Debit should work in chip and PIN or swipe and PIN mode. This uses the interac network and the merchant only pays the interac transaction fee and not the credit card interchange fees. But you might be paying an international exchange fee by your bank for every transaction, so you may be better off using cash anyways. We’re talking cents to a couple of dollars overall here, so up to you how you want to do it, no big deal either way.