I'm usually very opinionated, but I'm not sure what the best option for Sheppard is. I like extending the subway because it seems like a waste of the existing line to switch to LRT, and because 50 years (comment above from drum118 that Sheppard can't support a subway for 50 years) isn't that far off considering how long it seems to take to build anything. But as I'm not an expert and various experts have come out in favour of LRT... I can at least agree that the whole line should have been LRT in the first place.
Anyway I see two good options for city:
1. Transit city including Sheppard LRT plus a combination of additional funding tools - income tax, property tax, parking tax, tolls, congestion charges, distance-based fare increases on the TTC - which would go to fund the downtown relief line and further LRT expansion.
2. The Sheppard Subway, Downtown Relief line and Finch LRT (etc) with the same funding as above, but somehow make the Sheppard subway contingent on zoning changes to Sheppard (as required) and development charges in order to urbanize the street.