It was long hoped that SNC Lavalin will be the operator of the ARL, but financial market conditions prevented the negotiation of acceptable terms, an official announcement said.

"Naturally, we are disappointed by the outcome of the Toronto Air Rail Link Project. Given the state of financial markets over the past few years, lenders, both in Canada and elsewhere, are reluctant to lend money for full revenue-risk projects. As a result, an agreement that met our own standards of risk tolerance could not be reached with interested lenders," SNC Lavalin said in an official statement. Metrolinx will be responsible of the design, construction and operations of the project and will incorporate the work that has already been done to date. Metrolinx's operating division, GO Transit, has a 40-year track record of running passenger rail service. "Metrolinx is excited to be asked to deliver this transformational transit project connecting Union Station and Pearson Airport. The Air Rail Link is a signature project for this region and Metrolinx is looking forward to capitalizing on the important work already done to deliver this vital service to Toronto," Robert Prichard, President and CEO of Metrolinx said.

The government will continue to work with the Union Pearson Air-Link Group (UPAG), a subsidiary of SNC-Lavalin, to incorporate the design and development work that has been completed to date.

The ARL will provide a premium express rail shuttle service between Union Station and Pearson Airport. The new link will be ready for the 2015 Pan American Games.

"Toronto has a world-class airport and connecting this facility to the downtown core will make a dramatic difference to passengers. The ability to travel quickly between the airport and downtown is an important piece of the transportation puzzle for the city and the region. We look forward to working closely with Metrolinx to make this project a reality," Lloyd McCoomb, President and CEO of Greater Toronto Airports Authority said.

Construction is already underway on the GO Georgetown South Corridor to support the Air Rail Link connection.

About 5 million people travel between the airport and downtown annually and that number is expected to increase to 9 million by 2020.

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