07/18/2013 12:50 EDT | Updated 09/17/2013 05:12 EDT

Ontario puts Toronto subway project at risk with funding fight: transit chief

TORONTO - Ontario's governing Liberals are derailing a long-awaited subway extension in Toronto's east end by refusing to chip in more than $1.4 billion to help pay for the project, the city's transit chief said Thursday.

City council has approved the Scarborough subway, on the condition that the province provide all $1.8 billion that was originally pledged for a cheaper light rail project in the area.

The deal also requires the federal Conservatives to pitch in half the net capital costs — about $500 million — while the city pays the rest by raising taxes.

The subway will cost an estimated $1 billion more than the $1.4-billion, light rail project that was already underway.

Transportation Minister Glen Murray insisted the province is living up to its $1.8-billion promise to the city. Apart from the $1.4 billion that's allocated for light rail, about $85 million has already been spent on engineering and planning costs, he said.

Another $320 million will go toward renovating the Kennedy subway station to accommodate a new separate light rail line.

"It's not my job as the provincial government to do everything they say," he said during a press conference not far from Kennedy station.

"I don't take my marching orders from city hall."

Toronto Mayor Rob Ford said in an interview with the CBC that he was pleased with the province's contribution and suggested the $400-million difference could be found elsewhere.

"They're already out of the gate at $1.4 billion and the ink's not even dry," he said. "I'll take that, and I'll work on the other 400 (million)."

But Toronto Transit Commission chairwoman Karen Stintz said there's no point in moving ahead with the subway if the province won't cough up the full $1.8 billion.

"Council said: No $1.8B, no subway," she tweeted Thursday following Murray's announcement.

Murray bristled at Stintz's comment.

"Two points. One, it's our money," he said. "It's $1.4 billion — two-thirds. Find me a mayor anywhere in Ontario who wouldn't be jumping on joy for us picking up two-thirds — 66 per cent."

Killing the project by splitting hairs will backfire on municipal politicians, he suggested.

If the city wants more cash, they should go to the federal government, Murray said. Ottawa should put up one third of the subway cost, as they have with transit projects in other cities.

Stintz needs to decide whose side she's on, Murray said.

"What Karen Stintz is saying is that the federal government shouldn't be in for a third," he said.

"This is time for those people to stand with the people of Scarborough, or stand with the people who think that the people in Scarborough are second-class citizens."

The federal government has yet to give its answer, which council wants by Sept. 30.

"We await a formal proposal from the city and the province and we will examine it under our new infrastructure plan," Kathleen Perchaluk, a spokeswoman for federal Finance Minister Jim Flaherty said in an email.

Complicating the funding squabble is a looming Aug. 1 byelection in Scarborough, one of five Liberal seats that are up for grabs in Toronto, Ottawa, London and Windsor.

The opposition parties have accused the Liberals — who had nixed the subway proposal just two months ago — of backtracking to score points with Scarborough voters.

They'll face a backlash in the riding, said Progressive Conservative transport critic Frank Klees.

"That $1.8 billion should be committed without any hesitation," he said.

"It should not be up to Glen Murray to decide that $400 (million) should be diverted to something that he happens to think is a priority."

Scarborough-Guildwood NDP byelection candidate Adam Giambrone, who turned up at Murray's press conference, called it an "election-style announcement" near the contested riding.

The Liberals used to provide 75 per cent of the capital funding for transit, said the former TTC chair and mayoral hopeful.

"He makes it to be a big thing," he said. "I'm not sure they're ever going to spend that money, frankly, if we keep going on this debate."