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Because it's not "American MLB", it's just MLB. There are no restrictions for team locations.
I guess for the same reason that American hockey teams are allowed in the NHL - *National* Hockey League. They meet the requirements that the league sets and can prove that they are financially stable, as well as able to promote the game and give the fans what they want to watch!!
I believe that would be 'team' in the singular; as far as I know there is just the one.
Canada is in North America last time I checked. Seriously, MLB wanted to expand beyond the US border and Toronto at one time had great attendence records.
The MLB (stands for Major League Baseball) has a team in Canada since it is not just a national organization. Hence the the name "World Series" and not "National Series."
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