The $1-1.5 billion is difference in costs estimated between subway and LRT for Scarborough, the total cost is around $2.8 billion for a subway.
The Ontario government has committed $1.8 billion to the LRT expansion and transit projects, but now says only $1.4 billion can be transferred to LRT, due to costs of conversions and expenses spent already.
http://www.cbc.ca/news/canada/toronto/story/2013/07/18/toronto-subway-murray-scarborough.html
Ford wants Ontario and the feds to pay for pretty much all of it, with his token 'skin in the game' a relative pittance.
Ontario won't commit more then $1.4 billion and Flaherty would allow $333 million to be taken from Sheppard but won't commit any new money, it appears.
Which makes the subway dead in the ground, and the LRT will happen by default.
Another loss looming for Ford.