Let's use the word "inexpensive bike" rather than cheap bike.
Dual suspension = crack head theft magnet
Shiny POS from Canadian tire (e.g. Supercycle) = crack head theft magnet
For instance,
http://toronto.craigslist.org/bik/152402868.html = crap. Stay away.
Inexpensive and cheap
Inexpensive and great
Older well loved unobtrusive bike= Candy
Zachs has some links to some of the recent ones:
http://toronto.craigslist.org/bik/152057997.html for example or
http://toronto.craigslist.org/bik/151993641.html which is pushing your price range but I agree with Zachs; good option.
Apart from the craigslist bikes Zachs posted, Community Bike Network is having a bike swap on Sunday morning at MEC (400 King West). I'm not sure what there'll be for complete bikes, but it may be an option. Used bikes in shops are few and far between. Sportswap at Yonge and Eglinton'ish have some, and while you may luck out, a used bike from a shop will be pushing your price range. Stay away from places like Uncle Jacobs on Spadina Option 2. Find out when the garbage days are and wander around looking for discarded bikes.
I'll be on the early shift at the bike swap likely wearing a garish jersey, shants and cycling sandals (Cam=me) or pm me if you have a question.
Whatever you decide to do, buy a good lock. A good lock. A good lock. Repetition is the father of all learning. In Toronto your bike will get ripped before you know it. Never leave it outside, more than one lock if possible, remove all quick release components, lock it next to shiny new bikes with crappy locks.
Or, depending on your route and needs, consider bike share
http://tinyurl.com/rxagd
yo