When one thinks about the initiative to expand the Toronto City Centre Airport, there are lots of reasons to dismiss it as foolish.
Obviously, quality of life for the hundreds of thousands near the flight path, and further destruction of the waterfront as an attractive destination are at the top of the list. Not to mention the risk of plane crashes in densely-populated areas.
Financially, the hit on quality of life will also be felt in the devaluation of real estate. (My quick, rough estimate is that Harbourfront is home to $2 billion worth of condos. The undeveloped eastern harbourfront and the portlands are huge.)
From a business point of view, it seems like the plan is out to lunch. Airlines aren't exactly a booming business these days. Meanwhile, there are plans for a quick rail link to Pearson from downtown. Pearson is also partway through a massive expansion.
What's more, flights from the island face two other major disadvantages compared to flights from Pearson.
Planes from the island are usually a lot smaller, and therefore slower, than planes leaving Pearson. That's a major reason I have never used it. Flights from the island to Montreal used to average 82 minutes, whereas Pearson-Montreal flights are 71 minutes despite being 3% further from Dorval. This is why Air Canada doesn't fly to Montreal from the island anymore... only to Ottawa.
Flying time differences will grow dramatically for any distances beyond Montreal, as there is more time for cruising-speed travel. However, there are very few places worth flying to that are closer than Montreal. Air Canada currently goes to only 17 places that are less than the 315 miles from Pearson to Dorval:
When one factors in a 20-30 minute time savings in driving and check-in, there are several important cities that come within range. But is a net savings of 15 minutes on a less comfortable flight to New York worth huge subsidies and a ruined waterfront?
As for these smaller markets, the economics of flights to these centres is made more questionable by the realization that a main reason Air Canada flies from places like Windsor to Toronto is to allow these people to connect with larger, longer Air Canada flights to distant places (and vice versa). Otherwise, who wants to go to an airport, wait an hour and then fly an hour to a destination that you can drive to in three and a half hours?
UPDATE: I just remembered another complication that works against the island airport. Flights to the United States can only go to international aiports and passengers will have to clear customs and immigration after landing. Pearson travellers get pre-clearance during their waiting time.