It's funny how the TTC vending machines will not accept $5 bills but will accept $10 bills.
But it's quite possible that TTC vending machines are similar to many change machines across the country. $5 bills are heavily circulated, passed through numerous hands, and wear and tear more easily. $10 bills, on the other hand, while they do have the same life expectancy as the $5 bill, the don't wear and tear as easily (at least in this day and age) because they can't buy a lot of stuff like $5 bills can. If I recall, $10 bills are useful if you're buying a coffee at Starbucks or Second Cup, or any local coffee shop, or if you're at a bar buying a beer. You can't even buy a pack of cigarettes with a $10 bill anymore (depending on where you live). $5 bills rule greatly over $10 bills because they can buy a lot of popular high-demand items, such as a Pepsi, Coke, individual grocery items, chips/pop combo, bar/pop combo, donut/coffee combo, muffin/coffee combo, a Big Mac at McDonald's, a Teen Burger at A&W, lottery tickets, and the list goes on.
A lot of change machines will not give out change for a worn out $5 bill. Maybe a better chance that a crisp $5 bill will get you change but nothing else. A circulated $10 bill (though not too circulated) can be accepted no problem, because of its current low demand.
I also heard that secured cash dispensers (the ones tellers use to get the customer's cash) in at least some RBC branches where I am no longer dispense $5 bills. I can see why. A lot of $5 bills are heavily circulated and they never get replaced. Loading such dispensers with circulated $5 bills would be a recipe for increased maintenance costs, and possible machine breakdowns. Basically the same reason why $5 bills were removed from on-site ATM's starting in 1999 (maybe except for colleges and universities). The last on-site ATM where I live dropped the $5 bills in March 2002 - around the same time that the Journey $5 bill was first released. Seems as if the RBC branches are drifting away from the $5 bill for some time now, it started with the ATM's and now it's spreading to the secured cash dispensers. I stopped doing business with RBC after the last ATM stopped dispensing $5 bills. I came to RBC for a purpose, and since they stopped dispensing the bills I target at RBC, my job was done.
But yeah, to sum it up, $5 bills are basically not dispensed nor accepted in any kind of machine because of frequent usage, unlike the low-demand $10 bills.