There may be a huge legal glitch, although it might be in the City's eventual favour, albeit this is from the dissenting opinion that I've quoted prior. The glitch? That land may be Federal, at least in regulation! (How that affects air rights is an entirely other question, but the Feds just might want to be included in this scheme. They'd certainly bring massive legal weight to the situation, as well as funding, and perhaps the InfraBank)(The present day Railway Act alludes to RoW and by extension, air-rights, as being within their purview, although that might have to be tested in court. This is the case with all federally regulated lands)
https://scc-csc.lexum.com/scc-csc/scc-csc/en/9855/1/document.do
Edit to Clarify: What the SCC case above is about is not whether the railways own their RoW along the 'Esplanade Viaduct', they are accorded no ownership thereof, it's the *cost* of building the structure that is being challenged, specifically in this case by Grand Trunk Railway and Canadian Pacific Railway, who claim the City should pay for the structure, not them as prescribed by the Railway Board.
Whether that structure is owned by the railways is something I've yet to discover in the case, ("for the Good of Canada" indicates not) but it's a moot point as to air-rights, as the land belongs to the City, granted initially by the Feds to the City via the Province. I don't have direct reference to that handy, but here is indirect reference in another Supreme Court case:
Supreme Court of Canada
Adamson v. Rogers, 26 S.C.R. 159
Date 1896-03-24
[...]
1857, 20 Vic. ch. 80, intituled
an Act to amend the Act conveying to the city of Toronto certain water lots, with power to the said city for the construction of an esplanade and to enable the said city to locate the Grand Trunk railroad and other railroads along the frontage of the said city,—
https://scc-csc.lexum.com/scc-csc/scc-csc/en/3224/3/document.do
*Apparently*, even being City owned, the regulation of that land, and the air-rights above it appear to reside in the Railway Act for as long as that land is used as a federally regulated railway right of way.