I don’t think police should be marching in parades anyway.
I’m not sure about the details in the Toronto case, but I know that in Washington DC, there was a left-wing controversy about gay and lesbian police officers marching under a banner that identified them as (off-duty) police. There were also objections to the police putting up a booth that encouraged LGBT people to apply for police jobs.
The reason for both objections was the claim that People Of Color find police almost as SCARY as g-g-g-ghosts — “Oh, feets don’t fail me now!” (In the DC case, the left-wingers were overruled — most people, including black gays and lesbians, agreed that having some openly gay people in the DC police force was a good idea that should be supported.)
I don’t think any police force should be required to send a delegation to march in a Gay Pride parade (or any other parade, save perhaps for those relating to national, state, or city commemorations). But I think that individual police officers, if they’re off-duty and not in uniform, should probably be allowed to march in whatever parades they want — after all, the police are civilians.