By The Canadian Press

TORONTO - A provincial agency will now build a rail link between Toronto's Union Station and the city's international airport after a deal with a private company collapsed.

Metrolinx, a provincial transportation agency responsible for the Toronto and Hamilton area, will now own and operate the rail link.

The deal was originally granted seven years ago to a wholly owned subsidiary of Montreal-based construction firm SNC-Lavalin (TSX: SNC.TO).

The province says the rail link should ready in time for the Pan Am Games in 2015.

SNC-Lavalin says it's disappointed and blames the economy, saying investors were reluctant to lend money for the project.