Ontario's premier says he's concerned about the inflating costs of Ottawa's new transit system.

"In fairness, I think costs have escalated rather dramatically in terms of estimates. I think what we need to do now is to sit down in a very sober-minded way, talk this through and decide what it is that we can all afford," Premier Dalton McGuinty said on Wednesday,

The cost for the first phase of the city's new light rail transit plan has soared to $2.1 billion, up from an earlier estimate of $1.4 billion.

The plan includes light rail lines from Blair Road to Tunney's Pasture, with a downtown tunnel designed to get rid of traffic congestion in the city's core.

Last week, Ontario's municipal affairs minister said he had serious doubts that the city can afford to build the entire transit system, which has a cost that is now pegged at more than $6 billion.