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McGuinty to pledge cash for Toronto streetcar deal

Federal support up in the air as Ontario Premier, along with Mayor Miller, are expected to announce support for $1.2-billion plan

By Jennifer Lewington, Brodie Fenlon and Steven Chase

In a high-stakes political drama over transit funding for Toronto, Ontario Premier Dalton McGuinty and Mayor David Miller are expected in Thunder Bay Friday to pledge their support for a $1.2-billion streetcar deal.

What remains unclear - and still a matter of tense discussions - is what role, if any, the federal government might still play in funding 204 replacement streetcars for the city.

Late Wednesday, federal officials in Ottawa confirmed that Transport Minister John Baird is not expected at the announcement - and Ottawa will not be participating in it - but said no decision has been made about a possible funding role for the federal government.

Word that Mr. McGuinty will pledge significant financial support - after the province initially balked at the Toronto Transit Commission’s plans for the new generation of low-floor streetcars - marks a huge breakthrough for the city.

The news comes as a June 27 deadline looms for Toronto to seal a deal with Bombardier Inc. of Montreal, the chosen supplier of light-rail vehicles to replace the TTC’s aging fleet of streetcars.

Last December, the city agreed to put up funds for one-third of the project, but has looked to the province and the federal government for the balance.

The funding discussions have played out amid a sharp political dispute about whether the proposed streetcar purchase would qualify for federal government stimulus. Toronto’s streetcar proposal was the only one submitted for federal stimulus funds.

Last week, in an unguarded comment, Mr. Baird swore when he complained about the city’s stimulus request. He apologized to Mr. Miller the following day.

Meanwhile, Bombardier spokesman David Slack declined to comment Wednesday night.

Thunder Bay Mayor Lynn Peterson did not return repeated calls to her home and cellphone. TTC chairman Adam Giambrone could not be reached for comment.

Securing money for the 204 replacement streetcars for the TTC is only one piece of the city’s sweeping plans to extend light-rail service to areas of the city without much transit.

But the city needs to nail down funding for the 204 cars by June 27 before it can exercise an option to purchase an additional 400 light-rail vehicles for Toronto’s “Transit City” project set to unfold over the next decade.

Recently, the province and the federal government both announced funding for the Sheppard Ave. East light-rail line. As well, the province has publicly stated its plan to fund development of the Eglinton and Finch lines.

This week, adding fuel to the high-stakes political drama, was the release of an external analysis by a consultant hired by Bombardier of the economic benefits of the streetcar deal.

The report, widely distributed by Mr. Miller’s office earlier this week, showed the economic benefits would resonate through Quebec, Ontario and Manitoba, all struggling to enhance high-paid industrial jobs in the teeth of a recession.

The consultants estimated that the streetcar deal would create 5,700 direct jobs, with 4,650 in Thunder Bay, 350 in the Toronto region and 700 in Quebec, and another 14,800 indirect jobs in Ontario, Quebec and Manitoba.

In all, the project was estimated to yield $1.16-billion in wages, salaries and benefits, generating tax revenues of $240-million for Ontario and another $244-million for the federal government.

John Rafferty, NDP MP for Thunder Bay-Rainy River, said he’d be disappointed if the federal government were not part of the deal.

He said he has spoken to Mr. Baird on several occasions and believed the minister supports the contract, even though it fails to meet the fund’s eligibility criteria of local job creation and completion by March 31, 2011.

With files from Karen Howlett and Brian Laghi