I'm not perfectly current, but my understanding is that the plan is finalized with the Region and just needs to be funded. However the Region seems mostly focused lately on funding for other projects.
The Northfield bus garage was a big one for them because that will let GRT finally get artics to serve some of the (pre-covid) overcrowded routes, like the 110 college express (a direct point to point shuttle between Fairway station and Conestoga Doon campus), as well as some of the crosstown iXpress routes whose ridership I believe increased with reorganization of service after ION, as transfers are now easier and tend to naturally happen at stations rather than random bus stops in the middle of nowhere.
It should also help improve operations generally since there will now be a garage in Waterloo, and Northfield will become a pretty major transit operations centre with both the garage and the ION OMSF. The garage is also incorporating EV charging/servicing facilities to help transition to an electric fleet, which they've tentatively roadmapped to the mid 2020s, so it will save them having to retrofit it later.
Unofficially, a lot of this is clearly a response to some criticism and negatives - that the ION didn't deliver value proportional to its cost (I'd strongly disagree), that it's operated by a private, (I think) non union company which indirectly undermines Unifor (this is something I am critical of), that it serves as a wedge for union busting and strikebreaking by letting the Region continue to operate transit vehicles in some capacity during strikes, which came up during the GRT strike back in the winter, and basically that focus on ION translated to a neglect of the bus fleet. Drivers I've spoken to, especially in the months leading up to the strike, talked about there being a high attrition rate on the job.
The Region seems to have been taking steps to try to stabilize the situation by talking about expansion of bus routes (guaranteeing more work for drivers) and facilities, but that was pre-COVID. So far during COVID there's been a huge emphasis on partnering with municipalities around cycling and the push for bike lanes on regional roads like Coronation Blvd, but this was killed off by odious Cambridge suburbanite backlash, just like the Westmount lanes were effectively killed off by Waterloo suburbanites. So they're a bit stumped.
What I suspect is that once rebound from COVID is complete, the Region will start talking about the ION more as a way of building momentum for Phase 2. Local pols have also alluded to the Ford government's cancellation of the Hamilton line as a reason why they haven't put it forward. From a provincial perspective, even if the Ford government wasn't already inclined to cancel projects it hasn't come up with itself, Phase 2 could easily be seen as a "second line" when Hamilton hasn't yet seen its first, even though it's really just a line extension. So my guess is they're waiting to see who will be in office after the next election and will make their decision then.
