I want to fly from the US to Israel and am looking at a flight with a layover in Canada (PIT -> YYZ -> TLV). How does customs work on such a multi-country trip? Do I have to go through the process for both Canada and Israel (and then Canada and the US on the way back), or do I do it just once so long as I stay within the secure zone in the middle airport? If it's just once, is it at the destination or in Canada?
For virtually all international airports, as long as you are on a single itinerary with your bags booked through, you will stay in the transit area and do not need to clear immigration or Customs. However, if you purchased separate tickets for the two legs, this does not apply: you will need to pass through Immigration (which may require visas etc), collect your bags and check them back in.
Unfortunately the United States is, as ever, the odd one out. Transits through the US always require the full Immigration/Customs rigmarole, full stop. In the original poster's case, a transit through Toronto, Canada from/to the US, they'll need to pass through at least a "lite" version of Canada Immigration/Customs even if they connect on approved airlines via Toronto T1, although there are some special transit-without-visa rules for citizens of some countries resident in the US.
EDIT: Updated after Doc's entirely accurate comment.
I just landed in YYZ (about 2 hours ago) on a flight from PHL into Terminal 1, which is used by Air Canada and other Star Alliance carriers. Passengers with connections to Beijing, Hong Kong, and Shanghai were directed off to the special connecting version of customs by a cardboard sign, suggesting it might be other flights other times. Everyone else (including Israel) would have had to clear Canadian customs.
I don't have any Terminal 3 info for you.
I would think that you would be isolated into a special international terminal once you land in Canada. However, I am just speculating. If you'd like, I might recommend that you Consult Your Local Travel Agent (CYLTA). Enjoy your time in the Holy Land and cherish every second there!