Industry overall in Canada has many problems, but in the 416 specifically, the majority are being gradually priced out to the 905 and beyond.
This quarter the GTA industrial market has 3.9% vacancy*
http://www.collierscanada.com/en/Commercial-Property-Research
The old city of Toronto has a 0.1% availability rate according to Colliers 'GTA Industrial Market Statistics Q2 2013'
Low density industrial can't always compete for land with retail/ box stores, much less with multi-floor condos in trendy locations. This is why almost all jurisdictions have policies/ zoning to prevent conversion (if places across NA like Vaughan weren't giving away serviced industrial land, perhaps industry would go multi-level and wouldn't need zoning protection).
I talked to planners in my own ward (18) and found that industrial buyers have indicated an interest in purchasing industrial property but are not able to outbid developers who typically pay 2 - 4x the average industrial price (ward 18). Speculators have bought up much of the industrial land leaving buildings empty or underused (ready to be vacated) or demolish them.*
In the mean time developers, lobbyists & construction firms donate to pro-development councillors (mine also vice chair of planning) who push to rezone industrial to residential dramatically boosting land values/ profits.*
Despite the city's official goals, pols are helping big box, condos & large churches gradually squeeze out industry all over the city wherever demand exists. Despite rapid population growth the 416 has about the same number of jobs it had back in 1991, which has a lot to do with the large rise in reverse commuting to jobs which tend not to be practically accessible by transit.