Hi Serene,
Do not be too discouraged from a rejection letter from your own school. I know from speaking to a few profs from my own University (of Toronto), that there is some negative bias on taking in their own students because professors want to work with 'fresh blood' from a variety of backgrounds. Even my thesis adviser, who really wants to take me on, suggested that I do my PhD program elsewhere before returning to Toronto for a collaboration.
On another note, I see you have applied to Guelph and Western for I/O as well. Any news?
Thanks,
-P