Light rail solution: 4 billion dollars.
My solution: 0 dollars.
Yes, there is a bus congestion problem downtown. Solution: on the transitway, have one bus line instead of 50. Yes, the whole point of the transitway is to enable users to go from A to B without transferring. But that is not going to happen with light rail either.
Light rail isn't going to be faster. You do need fewer drivers and the theoretical passenger capacity goes up slightly. But that is it. Is that worth 4 billion dollars?
And the American experience has taught us that the capacity doesn't go up because the frequency of the trains is lower (see Baltimore). The convenience is also lower, because instead of a bus every 2 minutes, you have a train every 15 minutes.
Comfort on the vehicles might go up, but having to wait 14 minutes at minus 25 will cut into that equation...
An other way to reduce bus congestion without spending 4 billion dollars would be to have an express non stop service downtown. Thanks to the light synchronisation on Albert and Scott, even at rush hour, crossing downtown is actually quick. Most buses don't take advantage of the light synchronisation because they have to stop at the buss stops. But by having a transitway express line, all those transitway users who don't need to go downtown (Tuney's Pasture employees, University of Ottawa students, Altavista area employees, Algonquin College students, people going to the airport or to the Rideau Mall... ) would save time. The city would even save money as the bus usage would be more efficient. You would need fewer buses to serve the same number of passengers.
A light rail tunnel sounds like a good idea, but it might actually ad time to the downtown commute. Whereas buses are at street level, underground light rail stations would be deep under ground. Going underground could ad 4 minutes each way to the downtown commuter's journey.
If you absolutely want an infrastructure project, build a subway line under Bank Street from the Rideau canal to Hull.
Update (2008-05-22, 05:22): there ara actually 71 bus lines that use Albert and Slater:
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