Construction has begun on a bus terminal and office tower complex that proponents say will improve transit connections in Toronto’s downtown and transform the city’s skyline.

At a groundbreaking ceremony Wednesday morning attended by politicians, real estate executives and financial industry players, Transportation Minister Steven Del Duca said that the project, on Bay Street just north of the Gardiner Expressway, would link jobs to public transit.

Union Station, which has connections to the TTC subway, GO Transit, and the Union Pearson Express, is across the street from the development.

“A transportation network only succeeds if there really and truly is pervasive connectivity,” Del Duca said, describing the project as not only “fundamentally important for Toronto, but for our entire region.”

The $2-billion development, dubbed CIBC Square, will include two towers of 49 and 50 storeys each, one on either side of the rail corridor. They will house a combined 2.9 million square feet of commercial space. The leading tenant will be CIBC, which will move its headquarters to the site.

The new GO Transit bus terminal at 81 Bay St. to the south of the rail corridor will replace the existing station, which is on a narrow strip of land just to the north of the tracks.

According to Metrolinx, the provincial transit agency that operates GO, the station is aging and at capacity. GO operates nearly 600 daily bus trips out of the station which, collectively, transport 60,000 people.

The new 10,000-square-metre bus station will be nearly twice as big and have 14 bus bays, compared to seven now. It will also provide buses with easier access to the Gardiner and Lake Shore Blvd. The facility would be large enough to accommodate inter-city bus lines that currently operate out of the outdated Toronto Coach Terminal at Bay and Dundas St. But Metrolinx does not yet have a firm deal in place with other carriers.

The terminal is estimated to cost $102 million, which Metrolinx will fund, in part, by selling the land on which the bus station sits now to the project’s developers.

The first of the towers and the bus station are expected to be completed by 2020, while the second will be finished by 2023. Service at the existing station will be maintained until the new terminal is open.

The complex, built by Ivanhoé Cambridge and Hines, will include a one-acre park straddling the rail corridor.

At the groundbreaking, Mayor John Tory said he was “particularly interested in the park” as a test case for the concept behind Rail Deck Park, a planned $1-billion, 21-acre park over the rail corridor that would be further west.

Tory has been a strong supporter of the Rail Deck project, which is not yet funded.

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