Mayor Rob Ford was incorrect when he told the premier that the city needed $650 million from the province for the Sheppard subway to access $333 million from Ottawa, a federal spokesperson said Thursday.

The Harper government already intends to give the city the $333 million, said Vanessa Schneider, spokesperson for Transport, Infrastructure and Communities Minister Denis Lebel. The province would need to be a “partner” in any funding deal, she said, but would not necessarily need to contribute $650 million.

The $650 million in provincial money and the $333 million in federal money were tied together only under the former Transit City agreement to build light-rail transit (LRT) on Sheppard, Schneider said. Ford abandoned that agreement in favour of his subway plan.

“Basically, the conditions of the LRT agreement no longer exist,” Schneider said in an interview.

Under Transit City, the province was to pay two-thirds of the $1 billion cost, the federal government one-third. Ford policy director Mark Towhey told reporters Wednesday, as Ford apparently told Premier Dalton McGuinty, that this precise arrangement was generally required by the Building Canada federal infrastructure fund.

That is not true, Schneider said.

While she said other levels of government must contribute to all projects paid for with fund money, she said the specific amount of provincial assistance needed for Sheppard was up for discussion.

“Each project is worked through on a case-by-case basis,” she said.

A senior Ford official acknowledged he was “not an expert on the Building Canada fund,” but he rejected any suggestion that Ford had misled McGuinty.

Even after he was informed of Schneider’s comments, he said he still believed the existing fund “requirement” demands that the province provide $650 million. He said he now understands that, “in exceptional circumstances,” fund money can be activated with as little as a simple “match” by the province — in this case, $333 million.

Even that concession, however, may not be accurate. Fund rules say only that the federal government cannot provide more than 50 per cent of a project’s cost. The rules do not say Ottawa’s contribution to a project can never exceed Queen’s Park’s.

McGuinty’s press secretary, Jane Almeida, was diplomatic when informed of the Lebel spokesperson’s comments. “You'll have to talk to the city about whatever arrangements they've come to for federal funding,” she said.

A McGuinty government source was harsher. McGuinty was publicly cool to Ford’s plea for the $650 million, and the source’s comments made it sound even more unlikely that the Liberals will agree to provide the money.

Under the agreement that killed Transit City, announced in early April, the province committed to funding the $8.2 billion Eglinton-Crosstown LRT. The city took responsibility for the $4.7 billion Sheppard project, which Ford claimed would be paid for by the private sector.

The province agreed to provide up to $650 million to Sheppard if the Eglinton project came in under budget. On Wednesday, Ford asked McGuinty to commit the $650 million now, telling him that the city needed the money before 2014 to meet a deadline for the federal money.

“Despite the agreement between the mayor and premier four months ago that made the Sheppard line the city's responsibility, the city is now saying they need provincial funding up front for that project,” the McGuinty source said. “That’s a change from the agreement from April.

“One of the reasons that change is requested, the premier was told, was because the federal money was contingent on provincial money. Now it seems that isn’t true, either.”

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In a victory for Ford, Schneider said the federal government plans to find a way to direct the $333 million to the Sheppard project.

“We’re working very closely with the city and the province. And of course I can’t speak to what the arrangement would be for a new project, but we’re working very closely to make sure that this money is used on a transit project in Toronto,” she said.

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