The future of the Canadian Football League in Toronto has been thrown into renewed turmoil after a backroom fight between Ottawa and the country's largest sports concern.

Maple Leaf Sports & Entertainment – owner of the Leafs, Raptors and Toronto FC – has cancelled plans to include the Toronto Argonauts in its renovation of BMO Field.

As of 2018, this would leave one of the continent's most historic sports franchises without a venue in which to play. Right now, the Argos are caught in a next-level bargaining war between two much bigger players.

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As ever, the issue is money.

MLSE had planned a phased, two-year renovation costing $120-million, and had hoped for financial help from all levels of government. That was to include a $10-million loan from the city, and $10-million grants from each of the provincial and federal governments.

As part of that agreement, room would be made to accommodate the larger dimensions of the CFL playing surface, and there would be a promise to buy the flagging football team.

However, long after public announcements were made, Ottawa has yet to sign off on its part of the expenditure. The federal government's apparent problem? The optics of funding sports stadiums.

MLSE provided several fig leaves to give the government cover – including parcelling the money into grants for expected big events such as the NHL's Winter Classic and the Grey Cup, planned for BMO Field.

MLSE argued that the construction taxes alone – an anticipated $18-million – made the deal watertight politically. The feds thought otherwise, and continued to delay. As Ottawa dithered, MLSE lost patience. The company will now go ahead without the federal money and, as a direct result, without the Argos.

In a statement Tuesday, Ottawa appears to be shutting the door to the idea of funding the expansion.

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"Our government will not fund the BMO Field as long as it is used by a professional sports team," Vincent Rabault, spokesperson for Infrastructure Minister Denis Lebel, said in an e-mail Tuesday afternoon.

Finance Minister Joe Oliver, who is also the federal minister responsible for the Greater Toronto Area, declined to weigh in when asked about the issue earlier in the day.

"I don't want to make a direct comment on that," he said at a news conference in Ottawa. Mr. Oliver noted that the government has a multi-billion-dollar infrastructure plan that includes a significant amount of funds that are dedicated for Ontario.

"We'll be making decisions on a case-by-case basis," he said.

The new 10-year Building Canada Plan for infrastructure was first announced in the 2013 budget as a replacement for a previous seven-year fund that has expired. The roughly $47.5-billion plan includes a $14-billion New Building Canada Fund, with $4-billion going toward "national infrastructure" and the rest being divided among the provinces. The larger plan also includes the federal gas tax transfers that go directly to municipalities, and a $1.2-billion P3 Canada Fund for public-private partnerships.

In theory, the City of Toronto could spend federal gas tax transfer cash on the facility. Ottawa has also helped the CFL in the past, contributing $5-million in 2011 toward the league's 100anniversary celebrations.

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Without a pledge from Ottawa, MLSE has had new architectural plans drawn.

A $120-million reno becomes a $100-million one. The arena will be rebuilt to its current dimensions, meaning there will be no north-south extension and no room for football end zones. Ground will be broken in September.

The city is expected to sign off on the revised, soccer-only plan. MLSE has received assurances that the province will do likewise if the Liberal government of Kathleen Wynne survives a June 12 election. Wynne currently leads in the polls.

The decision has several roll-on effects.

Since there is no suitable alternative, it puts the Rogers Centre back in play as a football venue. That, in turn, creates a logistical problem for the arena's plans to move to a grass field for baseball. The Argos were asked to leave at the end of the 2017 season because football is too hard on indoor grass.

It also ends MLSE's interest in buying the Argos, putting them back on the market.

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The Argos would not respond to requests for comment, instead acknowledging in a statement that what had been on – a move to BMO – is now off.

"[W]e continue to work closely with MLSE on a variety of opportunities of mutual interest and benefit," the statement said, "and look forward to the eventual resolution of the funding challenges that impact their plans to renovate and modify BMO Field."

Within much of the MLSE hierarchy, buying the CFL team was seen as a favour being done in return for the opportunity to service the fans of Toronto FC. Without federal co-operation, no one feels the need to do any more favours.

It goes deeper than that. There is the strong sense within MLSE that Ottawa has let them off the hook. Supporters of the soccer club were deeply opposed to lengthening the field to accommodate the CFL. MLSE now gets to serve its base without taking the blame for a failed plan.

One voice within the corporation that will feel aggrieved is MLSE chairman Larry Tanenbaum. The minority owner is still on the hunt for an NFL franchise, possibly the Buffalo Bills. That team is in legal limbo following the death of founder Ralph Wilson, but is expected to hit the auction block in coming months.

While intrigued by the north-of-49 possibilities, the NFL does not want to be seen as undermining Canadian football. The league has made it clear that, if it was to allow a move to Toronto, it would prefer the prospective new owner also be in control of the Argonauts. As the NFL sees it, one owner for both teams guarantees the CFL's long-term survival in Canada's largest market.