07/15/2013 10:55 EDT | Updated 09/14/2013 05:12 EDT

Ford still opposed to Wynne revenue tools despite tax bump for subway extension

TORONTO - Toronto Mayor Rob Ford is inching closer toward approval of a subway extension in the city's east end, with council expected to make a decision Tuesday on the proposed multibillion-dollar project.

But whether the tax-averse mayor and Premier Kathleen Wynne can find some common ground on funding other transit projects is still in doubt.

Ford surprised many last week when he agreed to a "modest" tax increase to fund the subway project — which Wynne took as a sign that he may be open to new levies to pay for other transit projects.

"The principle of needing to have a new revenue stream to build transit ... there seems to be more agreement on that principle now, and from my perspective, that's a very good thing," she said Monday.

But the mayor quickly quashed any hope that he'd had a change of heart, saying he's still "totally opposed" to any new fees.

"I always have been and I always will be, so that's not an accurate statement," Ford said Monday after a meeting with Transportation Minister Glen Murray.

Wynne and the penny-pinching mayor, who campaigned on cutting taxes and finding cost-savings at city hall, have been at an impasse over new fees to pay for transit in the Greater Toronto and Hamilton Area.

Ford has refused to consider any of the proposed levies, such as a hike in the harmonized sales tax, that Wynne insists are needed to raise $2 billion a year to relieve congestion in the region.

But the mayor said he intends to work with Murray on the subway project, and the two are "definitely on the same page." He'll also seek federal funding, which could include money from the private sector.

Federal Finance Minister Jim Flaherty is also "on board," saying there's infrastructure money available for the subway, Ford said.

"They haven't given me an exact dollar value, but they said they're at the table with us. They agree with our subway proposal if it gets through council," he said.

Murray, who just two months ago nixed the idea of a subway, said he was "very pleased" to see that Ford is prepared to make an investment in transit.

"We have a federal government that is missing in action right now and we would really like to see it," he said.

"The federal government gets more than 50 per cent, almost 60 per cent, of the taxes out of this province and redistributes $11 billion of Ontario's taxes to other provinces."

Ford said he needs all the $1.8 billion the governing Liberals had originally pledged for a light rail project in Scarborough, as well as money from the federal government, for the subway extension.

Switching from light rail to a subway will tack on an estimated $1 billion to the project.

Flaherty spokeswoman Kathleen Perchaluk said Ottawa has set aside funding for new Toronto transit projects, with the money available for city proposals.

"We respect provincial and municipal jurisdiction, while providing our cities with predictable and long-term funding to make infrastructure investment decisions based on their own needs," Perchaluk said in an email.

Wynne denied Monday that the province's about-face on a new subway has anything to do with the Aug. 1 byelection in the Scarborough-Guildwood riding, one of five Liberal-held seats that are up for grabs.

But it's become a hot topic on the campaign trail, with all parties using it as political ammunition.

The Liberals have slammed NDP candidate Adam Giambrone — former chairman of the Toronto Transit Commission — for failing to deliver a subway extension to Scarborough.

The Progressive Conservatives are also campaigning on the issue, saying subways can be built without hiking taxes.

The province can create a dedicated revenue stream for transit in partnership with the private sector, said Tory Leader Tim Hudak.

"They're doing it everywhere in the world except here in Toronto," he said while campaigning with PC candidate and deputy mayor Doug Holyday in the city's west end.