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Ontario government officials say it will not cover an $85-million shortfall for the beleaguered $2.78-billion Spadina subway extension.

That means the City of Toronto will be on the hook for another $51-million — in addition to the $90-million already being requested of it to help cover a $150-million budget increase for the delayed project, according to a report written by city manager Joe Pennachetti. As part of a cost sharing arrangement, York Region has also been tapped to cover $60-million in cost overruns.

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Mr. Pennachetti says the $85-million shortfall stems from a trust fund set up by the provincial government. It put $870-million into the fund, and projected interest earnings of 4%, for a total original project commitment of $1.059-billion, according to Mr. Pennachetti. But it never made the money anticipated.

Mr. Pennachetti wants council to ask the province to cover that amount. But provincial officials quickly shot down that idea.