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If it were me I'd just get an average commute, provide a stipend of gas or transport costs within your city, e.g. 15km distance, or a monthly pass for local area transit. If I'd want to relocate someone I may offer a signing bonus to help with moving and settling costs.
It's a reasonable expectation that if your job is at a workplace in Toronto, being within city limits is not an unreasonable expectation.
If I am travelling to a location purely to do my job at that location, then travelling to that location is part of my job. I must be reasonably compensated for it either as part of my salary or as an extra (tax adjusted) payment.
Switch the pronouns and such to apply for Bob and Alice both.
No, the one with the longer commute should be taxed extra to account for all the damage caused to the environment, increased traffic, road wear and tear, etc.
Commuting should never be encouraged. Live where you work.
Offering to finance all or part of the tickets is a good option IMO. My company offers the German "job ticket" or whatever it was called again to a percentage.