Dorothy's dog bites boy in Canadian city (7)
I believe the answer is:
toronto
'canadian city' is the definition.
(I've seen this before)
'dorothy's dog bites boy' is the wordplay.
'dorothy's dog' becomes 'toto' (Dorothy's dog in The Wizard of Oz).
'bites' is an insertion indicator.
'boy' becomes 'ron' (**).
'toto' going around 'ron' is 'TORONTO'.
'in' acts as a link.
(Other definitions for toronto that I've seen before include "Provincial capital" , "Ontario's capital" , "Canada's largest city" , "North American city" , "Largest city in Canada" .)