The Hamilton Conservation Authority maintains a campsite at Confederation Park which is situated along the Waterfront Bicycle Trail. The ride is about 70 km one way, and can be comfortably cycled with camping gear in a day. We usually do this as a weekend trip, cycling to Hamilton one day, camping overnight, and then cycling back the next day.
The campground is well serviced as is right at the waterfront. There is also a water park and other attractions if you are planning a longer stay. The major downside of this campsite is its close proximity to the QEW, which means the hushing noise you hear at night is traffic rather than a gentle waterfall. On the other hand it is one of the few campgrounds in Southern Ontario that is easily accessible by bike from Toronto.
If you are cycling with children or otherwise wish to make the ride shorter, you can cover part of the distance by taking the Lakeshore GO Train, and then cycle the rest.
The waterfront trail from Toronto to Hamilton provides some pretty decent cycling, with much of it on off-road paved bicycle trails. We have enjoyed this ride every time we've done it.
We have extended this ride out as far as Niagara Falls, however the cycling conditions deteriorate quickly past Hamilton. In fact in many places the ``trail'' is the shoulder of a busy highway with very fast moving traffic.