Financier Robert Deluce has given city politicians notice he'll be launching a $500-million-plus lawsuit against the City of Toronto over council's decision to try and stop the construction of a bridge to the Toronto City Centre Airport.
Deluce has been planning to use the airport to launch REGCO, a planned regional airline that will fly to 17 destinations in North America.

But he maintains that a fixed-link across the western gap, linking the airport to the mainland, is essential for his business plan to succeed.

Last month, Deluce threatened to sue the city for an amount "in excess of $500 million," should council go along with an election promise made by Mayor David Miller to ask the federal government and the Toronto Port Authority to stop construction of the bridge.

Council ignored Deluce's threat when it met in early December and supported Miller's motion to ask the federal government to reopen the three-way agreement on the island airport.

A day after that decision, then-federal transport minister David Collenette said the government would accede to council's wishes. The Toronto Port Authority, meanwhile, halted work on the bridge earlier this week.

And yesterday, Deluce sent a letter to Miller and councillors saying he'd make good on the threat.

"This morning we instructed legal counsel to commence legal proceedings against Toronto," said Deluce in an interview. "The city will be named specifically in the form of a specific suit naming them as a defendant."

Deluce said the exact amount of the suit is still being determined.

"We have previously notified the city they would be liable for damages in excess of $500 million," he said. "I think that it's inappropriate for me to comment further on that."

Deluce said council's decision left him with "no alternative" but to launch the legal action.

"The actions of the city have damaged us economically and at this point I have no alternative - I'm really obliged to take steps to protect the interests of REGCO," he said.

Deluce said the company still has a deposit with Bombardier's deHavilland plant in Toronto to produce 10 Q-400 turboprop passenger aircraft. But he said his business plan is not "financeable without a bridge."

Toronto Mayor David Miller said the threatened lawsuit was an attempt to derail negotiations the city is having with the Port Authority.

"It was deliberately intended to interfere with discussions we're going to be having with the port authority," said Miller, on the phone from Chicago.

"The value of his paper airline in his estimation goes up every day. It's a transparent attempt to interfere with what Toronto Council has decided. The public interest is clear."

A meeting between the city and the port authority was cancelled yesterday and rescheduled for today.

Toronto Chief Administrative Officer Shirley Hoy said she's confident the city is standing on firm legal ground.

"Until we know what the details are the solicitor can't do anything, but we're still of the opinion that we believe the motion as it was worded and approved by council doesn't attract any liabilities," she said. "Under the tripartite agreement, all three parties who've signed it - the Toronto Port Authority, the federal government and the city - anyone can ask the other two parties to reconsider. That's all we've done."

REGCO's letter came as no surprise to those councillors who opposed Miller's plan.

"I'm not surprised," said Ward 39 Councillor Mike Del Grande (Scarborough-Agincourt).

"If I was in that person's shoes I'd probably be doing the same thing. But I kept hearing councillors and the mayor saying it wasn't going to cost us a toonie. Then legal staff said, 'Oh, it might cost us a little bit.' From a toonie to a little bit to who knows what? I'm going to have a lot of unhappy people in my part of town."

Ward 29 Councillor Case Ootes (Toronto-Danforth) agreed.

"It would have been a surprise if he hadn't sued us," he said. "I think it's going to cost more than a toonie. Many of us conveyed that message and held that opinion during the council meeting. How much more it will cost remains to be seen."