I think
http://dmoz.org/Regional/North_America/Canada/Ontario/Localities/T/Toronto/Arts_and_Entertainment/Photography/ would be the more correct category. The Regional branch of the directory usually lists sites predicated on their location, not service area.
As to the Arts and Entertainment vs Business and Economy discussion - bit of a toss up as you are "focused on the electronic distribution of images of professional photographers" which means your business is image sales, rather than artistic interpretation of events/objects/people in photographic form.
As I said the Locality is the first choice I'd have made, rather than the Metro Area (which should have sites with multiple physical locations within the metro - not the single one you have). (The submission page contained the following category description - Do not submit sites to these categories based on the area served by a business but rather by the physical location of the business.)
Dont fret it though, the editor that reviews the site will move it to the locality if they feel it better fits there than the metro.