Currently, my favourite London restaurants that use local ingredients are The Only on King, Abruzzi (Italian food made with local ingredients, also on King) and On the Fork (in the London Regional Gallery).
Braise is a new restaurant on Dundas St (across from Kingsmill's) which also uses local ingredients, but I haven't had a chance to try it out.
Here are 2 earlier threads you might find useful:
On The Fork
421 Ridout St N, London, ON N6A5H4, CA
The Only on King
172 King St, London, ON N6A, CA
Braise Restaurant & Lounge
125 Dundas Street, London, ON N6B, CA