Does the CPP death benefit go to the estate or can it be paid directly to an individual in Ontario?

Both are possible. The Canada Pension Plan death benefit is a federal, one-time lump-sum payment, and it's generally paid to the deceased's estate where there is one. Where there's no estate, or in certain other circumstances, it can instead be paid directly to an eligible individual, commonly someone who paid for the funeral, rather than going through estate administration at all.

Because CPP is a federal program administered by Service Canada, this is separate from Ontario's estate and probate process. The death benefit application and payment rules come from federal law, not provincial law, even though the money may ultimately flow through an Ontario estate. The current amount of the benefit changes periodically, so rather than relying on a figure you may have heard, check directly with Service Canada for the current amount and who qualifies to apply in your specific situation.

If you're handling a death and aren't sure whether to apply as the estate or as an individual who covered funeral costs, Service Canada's application materials set out the priority order for who can apply. Start there before assuming either path automatically applies to you.