Are governments limited in staff they can deploy to a consulate? [closed]

TL;DR: No. The situation you describe is almost certainly entirely the Russians' own doing.

The host country for an embassy gets very little say about that embassy's activities. They can refuse the letters of credence of an incoming ambassador, but this is a major diplomatic snub and is not too far off from breaking diplomatic relations entirely. They can delay the processing of diplomatic visas for other staff, or in rare cases reject them entirely, but this too would be highly unusual. And the most drastic step would be to declare some already resident staff persona non grata and kick them out, but this rarely happens unless the diplomat in question has committed a serious crime.

What's more, day-to-day consular activities like processing visa applications are typically not handled by full-fledged diplomatic staff at all, but by locally hired consular officers who are likely already legal residents and thus don't even need visas or any other sort of paperwork to start working.

So if the Russian consulate in Toronto you're dealing with can't staff its consulate, they either don't have the money for it, or they just don't care. (Given the general reputation of Russia and before it the Soviet Union for handling visa applications, I suspect both factors are involved, but would lean more towards the latter.)

In the time when I needed visas to enter Russia I queued at their consulates on three different continents. I have also queued at various bureaucracies inside Russia. On balance, I saw no difference between the two. It's part of what is and I doubt that questions put directly to staff will yield up anything more valuable.

In my experience each Russian consulate has ways that a person can join an 'accelerated queue' and get prompt service. Before drawing conclusions on the ethics surrounding this, observe that Madame Tussauds offers the same convenience along with most of the popular clubs in London. Unlike Madame Tussauds (where there's signage explaining how to jump the queue for a given price), it's down to you to find out how to do it (see the comment by Karlson).

The person who told you that staff shortages are the host country's fault was probably making an educated guess, but if it were true then the queues inside Russia would be different than those outside. But they are the same.