What I would do is this:
1) Convert Simcoe & York, and Bay & Yonge into opposing one-way pairs south of Wellington. This would simplify traffic flow to and from the highway dramatically. Ottawa has a similar setup with roads feeding to and from the Queensway. You end up with 2 northbound roads feeding into downtown instead of 3 or 4.
2) North of QQ, have 3 of the lanes dip into a tunnel, while one lane continues south to QQ. This would avoid a bottleneck at QQ, and would keep it as more of a local road. The end result is the visible traffic impact would be shifted less than 100m to the south in most areas, because the access to the highway would be between Lake Shore and QQ, whereas right now it's at Lake Shore.
Completely revamping the current waterfront plan would be regrettable, but I think the new plan that would emerge as a result of a proposal like this would be far better. Imagine a 40m+ strip of green space along the entire central waterfront. That would be absolutely incredible. Losing the slips would also be mixed, but just think of the development opportunities those would present. If they're putting up 70 storey condos on leftover slivers of land around the Gardiner, imagine what could be done with those pieces of land that would be "squared in" by the expressway. Each of those properties would result in proposals that would likely rival 1 Yonge. Not only would they present amazing development opportunities, they would also go a long way to covering the cost of the project, as sites that big would sell for a mint.
