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Ontario Minister of Transportation and Infrastructure Glen Murray takes question from the media after announcing in Scarborough that the province will pay two-thirds of the cost, which is $1.4-billion, to extend the Bloor line subway to Scarborough on Thursday, July 18, 2013.Michelle Siu/The Globe and Mail

The entente between Ontario and Toronto on a Scarborough subway is suddenly on the rocks over a $400-million funding gap that's pitting Transportation Minister Glen Murray against TTC chair Karen Stintz and Councillor Peter Milczyn, the Liberal government's own candidate in an upcoming by-election.

The fighting was so vicious Thursday that Mr. Murray interrupted his own news conference – held to laud the government's transit-building plans – to fire a broadside at the TTC chair, implying she would be failing Scarborough if she didn't fall in line behind him.

When city council cancelled plans to build a Scarborough LRT this week, it expected all $1.8-billion in provincial funds for the line to be redirected to the subway. The province, however, said only $1.4-billion will be available for the new project. The government maintains the other $400-million is needed for renovations to Kennedy subway station.

But without the extra funds, Ms. Stintz said, the subway is dead.

"The only way the subway works is if we have the full commitment from the province," she said as she left council chambers. "We need it."

Mr. Milczyn – who is running for the Liberals in the Etobicoke-Lakeshore by-election next month – said if the city can't secure the extra $400-million by the fall, city council should revert to the LRT plan.

Informed of Ms. Stintz's comments during his news conference, Mr. Murray shot back: "Maybe Karen Stintz should run in a by-election then."

"My message to Karen Stintz is: decide whose side you're on. Are you with the people of Scarborough?" he said in the blazing sun on the Kennedy GO Train platform, flanked by several local MPPs and Mitzie Hunter, the Liberals' candidate in an area by-election. "It's time to stand with the people of Scarborough or stand with those who think the people of Scarborough are second-class citizens."

Mr. Murray grew increasingly testy throughout the news conference. Asked about city council's stipulation that the province put $1.8-billion into the subway, Mr. Murray dismissed it out of hand: "I'm in charge here," he said. Later, when a journalist asked whether the government was agreeing to the subway to win the by-election, Mr. Murray questioned the reporter's credentials.

Mayor Rob Ford's office, which has been in discussions for weeks with Premier Kathleen Wynne's staff, went into damage-control mode as the war of words intensified. In a statement Thursday afternoon, the mayor said: "discussions are ongoing – we are moving in the right direction."

Queen's Park sources also sounded optimistic that the subway would be built, and that some combination of new revenue from the city – raised by a tax hike approved this week – and money from the federal government would cover the rest of the cost.

Ottawa so far has not committed any money to the Scarborough subway, but says the city can apply for it from an infrastructure fund.

"We await a formal proposal from the City and the Province and we will examine it under our new infrastructure plan," federal Finance Minister Jim Flaherty's press secretary, Kathleen Perchaluk, wrote in an e-mail. One city hall source said it was "realistic" to put together a proposal and receive an answer from the federal government before the end of September.

Others, however, did not share this rosy view. Councillor Denzil Minnan-Wong expressed concern at Mr. Murray's comments and worried the subway plan would be lost in political bickering.

"Unfortunately this may become a finger-pointing exercise instead of a transit-building exercise," he said.

TTC CEO Andy Byford, meanwhile, said the looming funding gap has him nervous his cash-strapped agency might be called upon to chip in.

"It certainly raises a concern with me that the shortfall would need to be found somewhere," he said. "I would reiterate that that should not come at the expense of the TTC."

Mr. Murray and Ms. Stintz did little to assuage anyone's fears as they continued their fight throughout the day. After his news conference, Mr. Murray gave an interview to the Toronto Sun where he attacked the TTC chair again.

They spent the evening duking it out on Twitter. Ms. Stintz continued to press Mr. Murray to hand over the $400-million and he argued that to do so would mean "robbing" other transit lines to find the money.

"COUNCIL said this subway contingent on $1.8 [billion]. Province needs to decide if Scarborough gets subway," Ms. Stintz tweeted at him.

"I wouldn't dream of dictating to council. Why would a Toronto city councillor think you should direct a prov. gov't," he replied.

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