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Toronto councillor Josh Colle is scrummed by the media on Dec. 3, 2014. Mr. Colle said Friday he thinks the city has budgeted for a “near worst-case scenario,” with talks nearing resolution over how much Toronto will have to pay for cancelling the light-rail transit project in Scarborough.Fred Lum/The Globe and Mail

With talks nearing resolution over how much Toronto will have to pay for cancelling the light-rail transit project in Scarborough, the city is setting aside enough for "a near worst-case scenario."

There was never any question that Toronto would have to swallow sunk costs associated with killing the project. But the city has long balked at the estimate of $85-million from Metrolinx, the regional transit agency that had been doing the project.

A draft agreement on the costs has been reached and the amount is expected to be close to the Metrolinx figure.

With the deal not finalized, though, all parties are keeping their cards close to their chests.

But the city had knowledge that this expense was forthcoming as it was crafting the 2015 budget and included funds to cover it.

"There's been an amount budgeted for," TTC chair Josh Colle said Friday. "The way I look at it is, I think the city budgeted for a near worst-case scenario."

The costs are due to council's decision in the last term to reject the fully funded light-rail project in Scarborough and replace it with a subway extension.

The new project would cost much more and a small part of the premium was known to include the price of making good on spending by Metrolinx.

Anne Marie Aikins, a spokeswoman for Metrolinx, said that the price tag includes project oversight and management, with associated salaries and administrative costs, plus costs for planning, design and engineering consultants.

There's also another part of the cost that speaks to the transit planning roller coaster that is Toronto.

In 2012, Scarborough was one of four Toronto LRT projects taken over by Metrolinx and the city was reimbursed for money the TTC had spent on them. Now, with Toronto ditching the east-end LRT and claiming responsibility for its replacement, the Metrolinx spokeswoman said it is seeking a re-reimbursement of the Scarborough-related money given to Toronto three years ago.

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