It may have been different here in TO, but in Ottawa, after selling annual licenses for years, I recall the City deciding they never achieved full compliance and lost money/couldn't justify the expense every year. So they stopped. Much like the cat license thing here.
You'd have to start with a provincial law requiring cyclists to carry and produce ID like driver's licences, or equip a squad of cops with chains and trailers to impound bikes. And the paperwork, even if they jsut issued tickets (See ID above) would be horrendous.
Never gonna happen with our present manpower-challenged police, and setting up a cheaper force would still make that license money disappear real fast. Offices, garages, walkie-talkies, HR people, vehicles, printing and paper, oh yeah and paycheques.
But a provincial ID law would be an excellent start. We'll just hafta figure out what's good ID for 11yera olds.