The theme of this year's march and rally was "Unite Against Austerity" and brought together members from various unions across the province.
Parade organizer John Cartwright said it was important for workers to send the message that they will not accept an austerity agenda from the provincial government.
"People are here to express their anger," said Cartwright, president of the Toronto and York Region Labour Council.
"The politicians are happy to give billions in corporate tax cuts and say to ordinary people, 'You have to tighten your belts' while the rich are getting richer everyday."
In the past few weeks, Ontario's teachers have been in a labour dispute with the provincial government over new legislation that will freeze their wages for at least two years.
The Liberals have also warned that other public-sector workers may also face a similar fate.
Cartwright said the large turnout was a signal that the labour movement is still going strong in Canada.
"This is a day about unions and our roles in society," he said.
"It's the labour movement that have taken poverty wage jobs in manufacturing, construction and elsewhere and turned them into decent jobs where people can raise a family on. That's been our historical role in society."
Those taking part in the parade included members of the Ontario Federation of Labour, Canadian Auto Workers, Canadian Union of Public Employees, and federal and provincial New Democrats.
Federal NDP Leader Thomas Mulcair was seen marching through the crowd.
"Today, we march in solidarity with our brothers and sisters and we dedicate ourselves to build, in Canada, a more responsible economy where no one is left behind," he said in a statement.
Teachers, paramedics, firefighters and energy workers were among those making appearances.
Many were dressed in their union colours, waving flags and carrying placards.
Some people marched, danced and bands could be heard playing up and down the four-kilometre-long parade route.
Labour day events were also scheduled in several other locations across the country.
For more than a century, Labour Day has been celebrated on the first Monday of September each year.
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