Economic cycles. There is a good chance that the economy will be better by 2014 which means that the provincial budget deficit will be smaller, and more funding will be available. The Sheppard light rail line will be an election issue even it requires millions in cancellation fees (see Mississauga gas power plant).
The problems with Transit City are too long to list: slow light rail lines which stop at every street corner, low capacity, too many transfers/discontinuous lines (4 transfers to get from Sheppard/Morningside to Humber College), lack of connection to Pearson Airport (huge employment area) in phase 1... For a city as big and rapidly growing as Toronto and with some of the worst congestion in North America, it is horribly inadequate. If Transit City is built we will waste billions replacing the overcrowded light rail lines with subways 20 years from now.