Bradburn wrote about the genesis of this photo at Torontoist.
For the earliest known photographs of Toronto, we have a sales pitch to thank.
Following the union of Upper and Lower Canada as the United Province of Canada in 1841, Canada’s new parliament drifted from city to city. Kingston, Montreal, Quebec City, and Toronto all hosted the wandering colonial government. On April 14, 1856, the legislature voted 64 to 54 in favour of ending its recent practice of alternating parliamentary sessions between Toronto and Quebec City. The job of determining a permanent capital was handed to Queen Victoria, who examined presentations from those two cities, along with presentations on behalf of Kingston, Montreal, and Ottawa.
While Toronto’s pitch failed to sway the queen (she named Ottawa the capital in 1857), it preserved a record of what the growing city looked like. The photographic and civil engineering firm of Armstrong, Beere and Hime was hired to provide a set of 25 photos for Victoria’s consideration, which were forgotten until an archivist found them by chance in 1979 while researching images of the British Columbia gold rush at the Foreign and Commonwealth Office Library in London, England. The photos were exhibited at the Market Gallery in 1984, and a set of copies were presented to the City archives as a gift for the city’s 150th birthday.
What is this a photo of?
King Street East, south side, looking west, 1856.</b>
City of Toronto Archives, Fonds 1498, Item 1.
At the left of this row of buildings is the Golden Lion, which rivalled Eaton’s and Simpson’s as one of Toronto’s major department stores during the late 19th century. Officially known as Robert Walker and Sons, the store earned its lasting name when a golden lion statue was placed above its entrance soon after it moved to the location shown here in 1847.
Renovated in 1867 and expanded in 1892, the store appeared to have a healthy future. But when no one in the Walker family was left to carry on the business, it closed in 1898. Some observers had doubts about the site’s future when the store was demolished in 1901. “In Toronto they are pulling down the old Golden Lion to make room for a new White Elephant in the form of a palace,” wrote the Hamilton Herald.
The replacement? The still-operating King Edward Hotel.
Again, go to The Oldest Known Photos of Toronto" for all the photos. It's a wonderful piece of research.