What about the price tags on previous subway extensions leads you to believe a measly 1.5 bil could buy you a subway line right in the heart of the city centre?
The Sheppard Subway cost 933M, which is about 1.5B inflation adjusted, and it's 5.5km long - about 300M CAD/km inflation adjusted.
Bay is less than 2.9km from Union to Bloor - at 1.5B that would be over 517M CAD/km, which is already a ~70% premium over Sheppard, probably enough to account for increased complexity in Downtown and maybe even enough to have ~800m average stop spacing instead of ~1.3km for Sheppard if using and shorter platforms and smaller stations.
As a sanity check, 517M CAD/km = 377 USD/km, which is about right for a very complex project in a normal-cost country. Some examples (USD/km):
- U5 through the center of Berlin, 310M/km
- Rome Line C, phase 3 (under central Rome beside the Colosseum and other Roman structures where they have to manually mine everything to avoid damaging Roman structures and ruins) - 414M/km
- Leipzig City Tunnel (center of Leipzig and sized for mainline
trains) - 346M/km
Whether a Bay subway is a good idea is a different question, but if this was anywhere with normal costs (Europe not including UK, Korea, Japan, mainland China or even 1990 Canada), 1.5B would actually be a pretty reasonable cost for a Bay subway from Bloor to Union.