Actually, no they don’t. There are 2 stadiums in Kitchener-Waterloo:
University Stadium in Waterloo (cap 6500 or so) is located in a residential neighbourhood (i.e. no parking) and is adjacent to a park. Both University teams in Waterloo play their games there. Expansion would be very difficult there.
Centennial Stadium is in Kitchener, located next to the Memorial Auditorium, but is also adjacent to the Hwy 7/85 expressway, so it can’t be expanded where it presently stands.
Neither facility is in particularly good shape and neither is really viable for expansion at all.
As a KW resident, I’d love to see a CFL team here, but I really doubt that it would fly right now. Maybe in 20 years or so…