A very-beginner of mine has been using a Trek FX 3.0 for the past couple of years, and about the same distance as you. It's relatively upright, so suitable for people who have not ridden a bike in a long time. A new one is just a tad over your budget, but I've seen used ones for around that price on Kijiji and CL in the GTA area. Might want to look into that.

You could just visit the LBS and see what they in that price range. I'm sure you can get something suitable for your first commuter.

BTW, are you able to use any of the trails around the city?