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A tense political battle over Toronto's waterfront airport, one sure to embroil the new federal Conservative government, flared again yesterday with news of a $500-million (U.S.) order of planes by a start-up regional airline.

Businessman Robert Deluce's announcement of a firm order of up to 20 planes, to be built by Bombardier Aerospace in Downsview, sparked tough words from Mayor David Miller and some local residents and cheers from some city councillors and aircraft union spokesmen.

"You have to make a choice: do you want an industrial or revitalized waterfront?" the mayor asked rhetorically at a news conference.

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"If this [plane order]includes an expansion of the airport, I will continue to fight for the revitalization of the waterfront."

But Merv Gray, chairman of Local 112 of the Canadian Auto Workers, called the plane order "fantastic news" worth several hundred jobs at the Bombardier plant.

An official announcement by Mr. Deluce's company, Regional Airline Holdings Inc., will be made today at Bombardier's Downsview plant, which produces the 70-seat Q400 turboprop aircraft for regional commuter service.

Cruising at a speed of 667 kilometres an hour, the aircraft is suited to mid-range commuter destinations such as Montreal, Cleveland and Washington.

The bombshell announcement flies in the face of Mr. Miller's successful election pledge in 2003 to kill a proposed bridge to the island airport, the money-losing operation owned by the Toronto Port Authority, a federal agency.

"My mandate is to ensure that airport use is not expanded," the mayor told reporters, adding that he will press the incoming government of Stephen Harper to turn over control of the port authority to the city.

During the election campaign, spokesmen for Mr. Harper hinted that a Tory government, in stark contrast to the Liberals, would be open to discussing putting the controversial entity in local hands.

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Olivia Chow, the new NDP member of Parliament for Trinity-Spadina, urged Mr. Harper "to take quick action and return the port authority back to the citizens of Toronto."

Brian Iler, a spokesman for Community Air, a residents group opposed to the airport, argues any new operation must undergo a federal environmental assessment.

At its peak, the downtown airport at the foot of Bathurst Street handled 400,000 passengers a year in the late 1980s, but that volume has plummeted to about 120,000.

In 2003, when Mr. Deluce announced a letter of intent to buy up to 25 Bombardier planes, his service envisioned up to 575,000 passengers a year (with overall traffic of 900,000).

Currently, Air Canada Jazz, the only scheduled carrier, operates only four flights a day to Ottawa.

However, on Monday, Mr. Deluce's City Centre Aviation (which recently purchased key terminal buildings on the island) issued an eviction notice for Air Canada Jazz as of Feb. 28, thus ensuring no competition for his new service.

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According to industry sources, the port authority plans to build a $3.5-million terminal on the mainland. Instead of a 22-metre bridge, it is building a 19-vehicle ferry to begin service in July, several months ahead of Mr. Deluce's expected start-up of air service.

Yesterday, Mr. Deluce and the port authority did not return calls.

In May of 2005, amid threats of a lawsuit by Mr. Deluce against the city, the federal government announced a $35-million settlement with the port authority but never revealed payments to Mr. Deluce.

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