YYZ is the International Air Transport Association airport code for Toronto Pearson International Airport. It is often used as a shorthand name for the city of Toronto, which is technically inaccurate for two reasons:

  1. Toronto has a second airport — Billy Bishop Toronto City Airport — with the IATA code YTZ;
  2. Pearson is actually located just outside Toronto in the neighbouring city of Mississauga. (Billy Bishop is on the Toronto Islands, which is a short distance away from the city's downtown core.)

Pearson has three large terminals and is a hub for most of the world's airlines (the Wikipedia article has a fairly comprehensive list). It is Canada's largest and busiest airport. 

Getting to and from Pearson can be a bit of a challenge for Torontonians, particulary those who don't drive. The TTC and GO Transit offer bus services to the airport, but there is no direct train there as there is in other cities. This, coupled with the convenience of Billy Bishop (colloquially known as the "island airport"), has made Pearson the second-choice airport for many people in the city. Having said that, most international flights out of the Toronto area only fly out of Pearson. This may change as Porter Airlines, which flies out of Billy Bishop, has appealed to the city for the ability to extend some of the runways so it can operate long-haul jets out of that airport.

You will often see people on Twitter using #yyz as a hashtag for issues relating to the city of Toronto. You will just as often see semantics geeks making the two points I made above in response.