OTA antenna is definitely the way to go, but installation is a real pain if you're living in a house. If you're in a condo downtown chances are that you'll only get a few channels like CBC, CTV, Omni and GlobalTV because of other buildings or if you're not facing the CN Tower. You might get more channels if you have a good line of sight. You can get an antenna like this
http://www.tigerdirect.ca/applications/SearchTools/item-details.asp?EdpNo=4361733&csid=_61 and put it on a balcony. You're not likely able to get anything bigger since the condo boards probably won't like them.
Obviously, if you're in a semi or fully detached house then get a normal size antenna like
http://www.tigerdirect.ca/applications/SearchTools/item-details.asp?EdpNo=5337076&csid=_61
It needs to be installed up high so hopefully, your house still has an antenna tower so you can just bolt it up top. If you still have one of those aluminium things on your house, don't tear it down! Otherwise you have to jury rig something that attaches to your roof / chimney. You still have line of sight issues so any obstruction like trees, other houses, telephone poles, etc. mess up the signal. Do the install when there's leaves on the trees too. Had a friend that tried the install during a warm winter and had excellent signal, but once the leaves came back he had to mess around.
The trick with any antenna is to point it properly. Doing that on the balcony is easy. Doing it on the roof is a real adventure. Best way to do it is install the antenna on the roof first, but don't bolt it down all the way so you can still rotate it around. Then run a long coax cable to the ground where you can use a small tv to check the signal. It's best to have one brave guy on the roof turning the antenna and one on the ground checking the signal. Older tube TV's and some flat screens will need a HDTV converter box. Any flat screen made after 2007 I think already has a tuner built in. TV's are do cheap these days that you can pick an extra one up just for the install and then use it in the kitchen / bedroom, etc. and you can still use a splitter to get signal to it.
Check out
www.otacanada.com if you're going the antenna route. Personally, I think it's worth the hassle since you can potentially get 20 or so channels (that's what I get in the west end of Toronto) for the low price of $0. Then you can troll the Rogers and Bell guys whenever they call you offering a great deal on their packages. Then you ask them to beat $0 per month forever. Tripped up so many agents that way.
You might want to check out a Roku streaming box too. I've never used one before so can't comment on channel line up, but I know it has free channels for TuneIn, Crackle and NetFlix obviously. I have no idea about the picture and sound quality.
