I always thought this is a 'government employees can't write english clearly' issue. A pellet gun over 500fps is legally considered a firearm (subject to registration, safe storage/transportation, requiring a PAL/POL). As such it would fall under the designation of a firearm for the MNR regs. I BELIEVE that the sub-500fps was included as an ADDITION to the firearms sentence, not as a limitation, was poorly written and has never been rephrased. I'd be curious to find the actual law to see how it's worded. I took a quick look but didn't find it. Anyway, that's the interpretation that makes the most sense.
The 2006 Hunting Regulations say "Firearms include air or pellet guns, bows and crossbows. You may use semi-automatic or repeating firearms for hunting in Ontario, but not handguns or fully automatic firearms. Air and pellet pistols with a muzzle velocity less than 500 feet per second may be used for hunting in Ontario."