Flaherty said the cash came at the request of Ford and city council.
"The message from the government of Canada today is you have our money, now let's get this subway built," Flaherty said at a news conference.
Harper, Flaherty and Ford then posed for pictures with smiles and handshakes.
Harper also posted a clip of the announcement to his official YouTube account.
While it may not seem out of the ordinary for the leader of Canada's largest city to be photographed with the prime minister, it was only about five months ago that two Toronto Star reporters and the editor of U.S. website Gawker reported seeing a cellphone video of Ford smoking crack cocaine.
Ford denied using the drug — and that the video exists — but Gawker and The Star stand by their stories.
While Ford and Harper both attended a Conservative barbecue in Toronto this summer, they have not appeared before the media together since the crack tape scandal erupted.
And that's why the images from Monday speak volumes, Sun columnist and Liberal strategist Warren Kinsella says.
Kinsella, a former adviser to prime minister Jean Chrétien, wrote Tuesday that Harper appearing in pictures with Ford proves the alleged video has vanished.
"There is no way on God's green earth – none – the RCMP, and/or the Canadian law enforcement/intelligence community, would have let Harper get that close to Ford if the latter was facing an imminent criminal charge, or proof of involvement in a serious crime," he wrote.
"Pictures say more than words. The Harper-Ford picture says plenty. Namely, the video is gone, baby, gone."
Of course, supporters of the mayor believe the video never existed in the first place.
In May, unnamed sources told The Star that the mayor informed senior aides at a City Hall meeting not to worry about the alleged video because he knew where it was.
In early June, John Cook, the Gawker editor who first broke the story of the alleged tape, claimed the owner of the video told an intermediary the footage was gone.
"The intermediary called to tell me that he had finally heard from the owner," Cook wrote. "And his message was: 'It's gone. Leave me alone.' It was, the intermediary told me, a short conversation."
In an article posted to the U.S. website, Cook wrote that the owner of the alleged tape was scared off by the "media circus that erupted after the story broke" and pressure from those in Toronto's Somali community.
Gawker raised more than $200,000 through a crowdfunding campaign to buy the alleged tape, but has since donated the money to four Canadian charities.
To those who closely followed this saga, the images of Ford posing with Flaherty are probably less surprising. The finance minister stood by his longtime friend Ford, even in the thick of the allegations.
In early June, the finance minister emphasized his personal relationship with the mayor in an interview with CBC's Evan Solomon.
"I've spoken with the mayor and I've spoken with members of his family. I'm very close to the family, and I won't comment further on that," Flaherty said when asked about the allegations dogging Ford.
Flaherty said his discussions with the mayor were of a personal nature.
CBC's Greg Weston lauded the finance minister at the time for sticking by the mayor.
"I think we should all have friends as good as Jim Flaherty's friends with Rob Ford," Weston said. "That says more about Jim Flaherty than it does about Rob Ford."
Harper and Ford are also friends. The prime minister attended the "Ford Fest" barbecue in 2011, where he praised the Ford family as a "conservative political dynasty" and lauded the mayor for "cleaning up the NDP mess" in Toronto.
In a move deemed unusual by some pundits, Ford endorsed Harper's Conservatives in the last federal election.
Two summers ago, Harper and Ford got together for a fishing trip at the prime minister's official country retreat in Harrington Lake.
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