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The subway could switch to undergrpound somewhere between Markham Rd and Tapscott Rd.
While there are tunnels in both scenarios, perhaps a bit less in yours, the cost of property acquisition likely makes it a wash.
Another possibility is connecting the McCowan subway station to Malvern Centre using LRT, and routing that LRT either south of the CP corridor or on the north side of Nugget Ave / McLevin Ave.
This is exactly what's currently being contemplated by the City, as part of the EELRT.
Though not necessarily what will happen.