Yep, the spider webs are definitely caterpillars. I didn't know that they were toxic though.
In Canada there are tons of trees with caterpillar nests in them at certain times of the year (spring probably) but they aren't usually a toxic variety. They do a lot of damage to the trees though, basically eat all the leaves on them.
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Yes, these ones are toxic. Not all of the varieties are toxic of course, as you say in Canada a lot of caterpillars are around. I haven't met these ones until we came to Spain, and it was a surprise for us too.