It's a bit like asking an Australian, "Should I live in Sydney or Alice Springs for a year?", if Alice Springs were a lot bigger. Go with Toronto.
Toronto is far better as cities go - it has a lot more to do (museums, art, shopping), better restaurants, and is an atttactive city. The public transit is also very good. I've only been to Edmonton proper once, but I wasn't hugely impressed; the park by the river is nice, and Old Strathcona is a good neighbourhood with a lovely public market, but the city as a whole (including downtown) is quite ugly, and the sky is a grayish tone because all of the oil industry. Also, you're from Australia, which as far as I know doesn't really do winter. Toronto can get cold - say, -25ºC on a cold day - and had a particularly nasty winter last year, but the prairies where Edmonton is located are <i>brutal</i>: think -40ºC.
Edmonton is ~4hr drive from Jasper National Park. If you lived there, you could go to the mountains on some weekends, but it would involve a fair amount of travel time, and you wouldn't have as much enjoyable stuff to do during weekdays or during weekends when you didn't want to take a long trip.
Living in Toronto, there's a lot of stuff to do in the city every day, good place to eat, as well as some fun day trips like Niagara Falls, and you could go to other places like Ottawa, or Stratford during the Stratford Shakespeare Festival (they have fantastic plays), or Georgian Bay, the Bruce Peninsula, and the Muskokas for hiking and canoeing on weekends or long weekends.
Even though I'm from Western Canada and love the Rockies, I would strongly recommend living in Toronto, and taking a week or two (or more) to visit the Rockies (and coastal BC, too) at the the end of your trip once you've saved up some money. Seeing the Rockies is definitely a must-do if you're in Canada for a year, but you don't need to live in Edmonton for a year to do it.
Living in Toronto IS tremendously expensive - for cost reasons, you might want to think about renting a suite that's shared with one or two other people; that would also help you get to know people. Also, get a place with air conditioning if you possibly can - summers get very muggy.
(By the way, if the conversation in the previous few posts is confusing you: Alberta has a long reputation as Canada's most conservative province, but it's just elected the NDP - Canada's left-wing, social democratic party - as its provincial government. That's the first time in Alberta's history the NDP has even had a respectable number of seats, so it's a bit of an earthquake in provincial politics.)