People keep saying that the NCC has said no to LRT on the Parkway, but it isn't really the case. What they've said is only as a last resort, if the city can demonstrate there's no practical alternative. The study for the western corridor is only getting under way and the question is far from settled. The alternatives to the Parkway are themselves problemmatic. A surface option on Carling carrying 15k riders per hour in trains 4-6 cars long seems pretty far-fetched, and frankly a (partly) surface option in the Richmond corridor, while probably quite feasible from an engineering standpoint is going to whip the local residents into such a frenzy of howling that I doubt any politician would back it. This leaves an underground option, which could cost four times as much as the Parkway.
The decision-making process for this extension is going to be much tougher than anything seen with the downtown tunnel study, which is the main reason it wasn't included in the first phase. The Parkway may turn out to be the only fast, affordable, and politically possible option for getting the bulk of the riders downtown from the west end.