The federal government has formally announced that it is reallocating $330 million in funding from the Sheppard East LRT to a light rail line in North Etobicoke, casting further doubt about whether the Sheppard project will ever be built.

At a news conference at Humber College’s North Etobicoke campus Friday, Finance Minister Bill Morneau confirmed that Ottawa was pulling the Sheppard money and putting it toward the construction of the $1.2-billion Finch West LRT instead.

The 11-kilometre, 18-stop linewould run from the soon-to-be-opened Toronto-York Spadina Subway Extension to the college.

“The Greater Toronto and Hamilton Area, and specifically the communities of Jamestown and the Jane-Finch neighbourhood, will see the direct impacts of improved service reliability, better access to public transit, reduced travel times, and, importantly, less congestion,” Morneau said.

But, prior to the announcement, the Finch LRT was already fully funded by the province. As the Star first reported last year, in March 2016, the provincial Liberals asked their federal counterparts to shift the money from the Sheppard line to Finch.

The province explained its request by saying the federal funding, which is coming from the Building Canada Fund, was set to expire unless it was used soon, and Finch is scheduled to be built before Sheppard.

However, there is little political support for the Sheppard LRT among local politicians at both the city and provincial level, with some advocating it should be replaced with an extension of the TTC’s existing Line 4 (Sheppard) subway.

That’s despite a city report that found ridership for a Sheppard extension would be just 7,800 people per hour at its busiest period, well below the volume that normally justifies a subway.

The lack of backing for the LRT, as well as the federal government taking the rare decision to remove funding from a major infrastructure project, has led to speculation that the Sheppard project is effectively dead.

Ontario Transportation Minister Steven Del Duca insisted Friday that wasn’t the case however, and stated the reallocation was merely a case of “better to move it than to potentially lose it.

“At a certain point, that money, if it wasn’t used for the project that it had been identified for, would no longer necessarily be made available,” he said.

“So we wanted to make sure that we took advantage of a very generous and very important contribution to help actually deliver on these.”

Del Duca said that the Sheppard, Finch and Eglinton Crosstown LRTs “are all fully funded” under the province’s $8.4-billion investment in Toronto transit.

But speaking to reporters at city hall Friday morning, Mayor John Tory made it clear that he still considers the question of whether to build an LRT or subway on Sheppard to be an open one.

Asked whether he was concerned about Ottawa reallocating the funding to Finch, he replied: “First we have to decide what we’re going to do on Sheppard, and, as you know, that’s a subject that gets divided opinions going in the city and in that part of town, so we have some discussions to have on that as a city, let alone with the other governments as to what our priorities are.”

The $1.1-billion Sheppard LRT was scheduled to be complete by 2013, followed by Finch in 2015. The opening dates have been pushed back several times.

In 2012, the Sheppard line became the subject of an intense fight at city hall, when former mayor Rob Ford attempted to replace it with a subway extension, only to be rebuffed by city council.

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In 2015, the province announced that Finch would be built first, and construction for Sheppard wouldn’t begin until after Finch was completed.

The Finch LRT is scheduled to enter service by 2021.