their website does not mention anything about free service, just reduced service.
Wednesday, December 31, 2003 – Reduced peak period service and later evening service: Subway and most routes start at 6:00 a.m. Afternoon peak period service from 12:00 noon to 5:00 p.m. Most routes with late evening service continue until 3:00 a.m. Extra trips on all Blue Night routes between 3:00 a.m. and 4:00 a.m.
New Year's Eve last train details:
Yonge-University-Spadina Subway–leaves Union Station at 2:31 a.m. for Finch Station and 2:36 a.m. for Downsview Station
Bloor-Danforth Subway – leaves Yonge Station at 2:38 a.m.
for Kipling Station and 2:38 a.m. for Kennedy Station
Sheppard Subway – leaves Sheppard-Yonge
Station at 2:58 a.m. for Don Mills Station
Scarborough RT – last train leaves Kennedy
Station at 3:05 a.m. for McCowan Station
Thursday, January 1, 2004 – Sunday service.
Subway and most routes start at 9:00 a.m.
Friday, January 2, 2004 – Reduced peak period service.
Subway and most routes start at 6:00 a.m.