It’s official: Metrolinx has sent the city a letter confirming that work has effectively stopped on the conversion of the Scarborough RT to an LRT.

“We will not expend any more funds on the project because it no longer enjoys the essential support of our partner, city council,” says the Aug. 2 letter to city manager Joe Pennachetti.

The message from Metrolinx CEO Bruce McCuaig comes about a month after council voted to pursue an extension of the Bloor-Danforth subway northeast to the Scarborough Town Centre, rather than move ahead on an LRT.

But the subway approval was contingent on the city finding the funds — including half from the federal government — to cover the difference in cost, estimated to be about $1 billion, although many believe that’s a conservative estimate.

The Metrolinx letter leaves the door open, however, to the city changing its mind yet again and returning to the $1.8 billion LRT plan the province had promised to fund in full. Metrolinx says it needs to apply about $400 million of that money to redesigning Kennedy station for the Eglinton-Scarborough Crosstown LRT.

“In the event the city suspends pursuit of the subway extension, Metrolinx is prepared to return to implementing the current project,” writes McCuaig.

Councillor Josh Matlow (Ward 22, St. Paul’s), who argued vigorously against the subway proposal, is holding out hope that will happen.

Calling the subway plan “the mayor and council’s billion-dollar boondoggle,” Matlow believes a subway extension will cost far more than the $1 billion difference council talked about last month.

“I heard $1.6 billion and $1.8 billion, and it’s going to come out of taxpayers’ pockets,” he said, noting that the 7.6-kilometre subway extension would serve far fewer Scarborough residents than the 9.9-kilometre proposed LRT.

In addition, said Matlow, the city is on the hook for at least $85 million in sunk costs — money already spent developing the LRT.

“Not only is the city of Toronto now responsible for up to $100 million in sunk costs, but it will also increase the city’s debt by over half a billion and have to hike property taxes to cover the servicing charges,” he said.

McCuaig’s letter also reconfirms that the province would contribute to the subway project only $1.48 billion, rather than the $1.8 billion that the city assumed when council voted in favour of the subway.

Matlow said that gives him hope the LRT plan will be back on track in fall when council confronts the fact that its approval of the subway was contingent on the province providing $1.8 billion. It was also conditional on the federal government providing half of the additional funding needed for a subway, something Mayor Rob Ford has said he’s already pursuing with federal Finance Minister Jim Flaherty.

The Metrolinx letter says sunk costs for the LRT will be borne by the city.

“Once city council finalizes its position on Scarborough rapid transit, we can mutually determine an effective process for the city’s review of the sunk costs. … Some of these costs relate to payments Metrolinx has made to the TTC from the time the TTC was managing the project. In addition, costs associated with the signed contract with Bombardier for the delivery of light rail vehicles will not be known until negotiations with the company are completed,” McCuaig said.

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Subway advocates, led by Ford, say Scarborough residents want a subway. A poll by Forum Research showed that the subway option is the most popular among Torontonians. However, support for the subway dipped when the poll explained the planned route would provide fewer neighbourhood stops.

TTC chair Karen Stintz (Ward 16, Eglinton-Lawrence) has argued that the subway offers transit riders added convenience because it eliminates a transfer at Kennedy Station between the LRT and the subway.

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