Stephen Harper is going to help Toronto Mayor John Tory pay the fare for his $8.5 billion “SmartTrack” public transit project.

The PM was in Toronto with Finance Minister Joe Oliver at his side on Thursday to announce the federal government will pay up to one-third of the costs of the ambitious SmartTrack project, which will extend the city’s existing transit network west to Mississauga, east through Scarborough and north to Markham.

Harper, Oliver and Tory were at the Toronto Transit Commission’s bustling Hillcrest Complex hub to announce the $2.6 billion in funding on Thursday afternoon.

“Today’s biggest challenges often come in moving people around large urban areas,” Harper said in his announcement.

Tory praised the PM for his funding pledge, and for setting up the “first-ever permanent national transit fund.” He said SmartTrack will help Canada’s transit system remain competitive with those in other countries around the world.

“I am more confident than ever that the people of this city will get the relief they so desperately need,” he said.

Oliver, whose home riding is in Toronto, described the city as “an engine of the Canadian economy” that relies on public transit to get workers to their jobs. “If we cannot get people moving in and around the GTA, our engine will eventually sputter,” he said.

Harper also announced the establishment of a Public Transit Fund of $1 billion per year dedicated to “help Canada’s municipalities help their commuters.” He said the Public Transit Fund was developed with projects like SmartTrack in mind.

The plan, which Tory named SmartTrack during his election campaign, will see the city's subway system expanded to include a 53-kilometre above-ground rail link between Scarborough, downtown Toronto and Etobicoke. Tory promised 22 new subway stations, many of which will be built along existing GO Transit tracks.

Tory recommended the city cover one-third of construction costs, with the remaining funding coming from the federal and provincial levels of government. The mayor now has those federal funds secured.

The feasibility of the plan is currently under review.