And so, as pretty much expected, the federal government announced it would spend $4.8 billion on Toronto transit building projects.

This is great news for Toronto transit, right? It is, probably.

Mayor John Tory said so, right away. “This is a huge victory for Toronto and will lead to better transit for the entire region,” the mayor said in an emailed statement immediately after the announcement.

And yet, it comes with bad news for the premier of Ontario and the mayor of Toronto, too. For as much as it represents a 33 to 40 per cent share of Toronto’s most pressing transit construction plans — the relief subway line, the Eglinton East LRT, the waterfront LRT, SmartTrack — for the heads of the more local governments, it is also a bill.

Read more:Ottawa to require Ontario to pay one-third of Toronto’s new transit projects

To receive the cash, and build the transit, each of them is going to need to come up with their own money to chip in. Neither of them seemed to have any idea how they would do so.

The federal contribution requires at least 33 per cent matching funds from the province — which amounts to at least about $4.5 billion new dollars in the case of the projects on the city’s priority list.

And if the province ponies up, that leaves the city to come with the remaining share of the funding for these projects — an amount probably north of $4 billion.

The province chose some odd words of celebration to mark the occasion: “This is the first step in negotiating a bilateral agreement,” a spokesperson for the provincial infrastructure ministry told my colleague Ben Spurr. Indeed, Spurr reports the ministry was not immediately willing to commit to funding the one-third share of these projects.

I understand that it’s a lot of money. I understand that the provincial government likes to look like it plans and runs its own affairs, rather than meekly taking bajillion-dollar orders from the feds. So, you know, first step blah blah bilateral blah may be perceived as a dignified pause before the triumphant announcement of a coincidental decision that was not coerced at all to graciously contribute a one-third share of funding these projects.

But if the hesitancy is more than that, then Premier Kathleen Wynne and her colleagues ought to take careful note that if a Liberal government at Queen’s Park turns its back on $4.8 billion for Toronto transit being offered by the Liberals on Parliament Hill, thereby stiffing every voter who ensured both of those Liberal governments virtually swept Toronto seats in the most recent elections — well, she should remember she faces another election next year.

Mayor John Tory, of course, has been reminding her of that for some time, beating the drum for Wynne’s government to pony up dollars for Toronto transit and social housing. He indicated right after the federal announcement that he intends to continue his campaign, if anything, turning up the volume now that the federal dollars are waiting on the opening of Wynne’s own wallet.

But then, while Tory is standing outside the premier’s window with a boom box over his head, he also has his own share of the funding to figure out. He’d like to arrange it so the city only has to pay 20 per cent of the projects’ costs, but may have to pay as much as 33 per cent. In either case, that means coming up with somewhere between $3.5 billion to $4.5 billion.

How’s he going to do that?

“I can’t answer that question yet,” Spurr reports him saying. After all, the provincial government killed his road-toll proposal, Tory notes. I will note that the province has also, apparently, vetoed a city sales tax on liquor tax. The land transfer tax goose may well be just about out of golden eggs. And Tory himself has nailed his colours to the mast refusing a steep property tax hike.

My very rough estimate is that servicing a 30-year loan of $4.5 billion would cost something like $150 million a year — equivalent to a 6 per cent property tax increase. (The roughly $1 billion city share of the Scarborough subway is being funded over a similar period of time by what was a 1.5 per cent dedicated property tax levy.)

What’s left, beyond those options? Selling off half of Toronto Hydro — which Tory took off the table last year — would only raise about $1 billion, and would also rob the city of a source of annual revenue that would need to be made up. A vehicle registration tax (maybe worthwhile anyway) is unlikely to get us even halfway there.

Worse still, this need for transit-building cash isn’t the only demand on the city’s bank account — already the city faces a whole lot of other funding pressures for other priorities, many of which it has already approved but not figured out how to pay for: the social housing repair backlog of several hundred million over the next two years; the climate change plan; the anti-poverty plan; and the other usual list of pressing programs.

Icing on the cake: the city is at its own self-imposed debt limit, so will need to do something about that to create room for more building.

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There are side issues with the federal announcement — whether it includes the $660 million contribution to the Scarborough subway or not, whether it will be enough to cover even a third of the priority project budgets, whether those budgets are reasonable or will spiral up higher as soon as detailed planning begins — but before even getting to them there’s a more fundamental issue. When the feds kick in $4.5 billion, will the province match it? Will the city? And in the latter case, how?

Great news for Toronto transit? Probably. But there are a lot of headaches, arguing and legitimately difficult decisions — and a couple of election campaigns — to get through before anyone can really begin to celebrate.

Edward Keenan writes on city issues ekeenan@thestar.ca . Follow: @thekeenanwire

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