Dalton McGuinty's Liberals would dearly like to steer clear of a public fight with Toronto Mayor Rob Ford over his bid to build new subway stops. But an accounting quirk could make that battle impossible to avoid.
Under the "Transit City" plan favoured by Mr. Ford's predecessor, David Miller, the province would not only have paid for four new light-rail lines; it also would have owned them. As a result, it would have been able to book the $8.3-billion commitment over the next 30 years - much like a mortgage - rather than paying it all up front. Given that the government is currently battling a massive deficit, this scheme was seen as pivotal to the project's affordability.
But for the province to claim ownership of new subway stops added to an existing line, which is the form of transit expansion that Mr. Ford successfully campaigned on, is a much more dubious premise. Those costs would be immediately applied to the province's books over the decade of construction, adding hundreds of millions of dollars in annual expenditures even as the government tries to claw its way out of the red.
The question facing Mr. McGuinty's government is, at what point does it become irresponsible to spend taxpayers' cash in order to keep a popular new mayor happy during a provincial election year?
There are more obvious costs than the accounting issues, when it comes to scrapping Transit City. There's the $130-million already spent on them, which would essentially be tossed away. And there are unknown millions more in penalties for cancelling $1.3-billion in construction contracts, although those might be minimized by having the original contractors (such as Bombardier Inc.) take on the new work.
But sources say the ownership question is the biggest stumbling block as provincial and municipal representatives meet behind closed doors. From the province's perspective, it's essentially the difference between spending the money and spending it intelligently.
That might not be the case if Mr. Ford were championing a plan that added value in other ways. But the opposite is true. The big, overarching problem is that, even setting aside the additional short-term costs, the mayor is proposing to give the province less bang for its buck.
Although hardly a panacea for Toronto's gridlock, the four LRT lines in the original plan were a reasonably comprehensive attempt at citywide progress and would have helped create a more seamless system through the broader region - the vaunted premise behind Mr. McGuinty's "MoveOntario 2020" plan. By contrast, extending the Sheppard subway - Mr. Ford's first priority, to the apparent exclusion of others - would serve only one area of the city, where there's little indication of the density to require it.
That may be a worthwhile investment for Mr. Ford, helping him fulfill his campaign promise to deliver new subways; there would be no immediate downside for him, since a different level of government would be paying for it. But Mr. McGuinty has an obligation to the rest of the province, too. And it's hard to believe that money couldn't be better spent elsewhere - particularly since other municipalities, including neighbouring Mississauga, would be perfectly happy to build cheaper LRTs.
A compromise may yet emerge. Mr. Ford could be called upon to test his faith in public-private partnerships by drumming up some of the money for the subway line, rather than relying solely on the province. And in return for partial funding of that project, the province might be able to salvage some of its previous light-rail plans - most likely the centrepiece Eglinton Avenue line, which would be largely underground and thus look enough like a subway for Mr. Ford's liking.
That would mean that some of the provincial costs would still be spread out over the decades to come, restoring at least part of the original funding premise.
But if the ongoing talks don't provide some middle ground, the policy considerations - combined with how the whole thing will be perceived outside Toronto - should give the Liberals pause.
Nobody wants to go to war with Mr. Ford, who's still on his honeymoon and has political capital to spare. But at what cost peace?
Adam Radwanski