Region of Waterloo International Airport - YKF

[timc]

What is the source of that prediction, and even if such a ceiling was hit, what would keep us from expanding Pearson instead?

That's in the GTAA study documents. And, as others have said, the ultimate limiting factor will be runway capacity. Those are not easy to add -- see London Heathrow for a prime example!
https://torontopearson.com/masterplan/

OK, so I took a look at that document, and it says

Because of an industry-wide shift to larger, high-density and more fully occupied aircraft, over the next two
decades, proportionally fewer flights will move greater volumes of people and goods. We therefore project faster
growth in passenger and cargo traffic than in aircraft movements – which we expect to grow at about 1.5 per cent
annually. Our most likely scenario for 2037 suggests that aircraft movements (takeoffs and landings) will increase
to 632,000 from today’s 478,000. At the same time, the average number of passengers on a plane passing through
Toronto Pearson will be 140, compared to 108 today. This represents a 30 per cent increase in the productivity of
our runway system. Where our 2008 Master Plan anticipated the need for a new runway, we now expect to be able
to meet demand with existing capacity throughout our 20-year planning period.