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Rob Ford, right, has asked for a detailed financing plan for a subway into Scarborough.J.P. MOCZULSKI/The Globe and Mail

After months of inveighing against going to the taxpayer to fund transit, Toronto Mayor Rob Ford is willing to accept a modest rise in property taxes to pay for a Scarborough subway, pitching it as a necessary investment.

The famously penny-pinching mayor said on Friday that it would cost only about $5 per household annually to replace a planned light-rail transit line in Scarborough with a subway, provided Ottawa and the province chip in as well.

"Do we want subways to go to Scarborough, or don't we?" Mr. Ford said at a press conference in which he indicated he could accept a 0.25 per cent increase in property taxes, to begin after the next election.

Earlier this week, The Globe and Mail reported that the province and the city have been in talks about the subway and that the Liberal government has backed away from assertions it would move forward with the LRT.

Toronto City Council will decide next week whether to push for a subway in place of the LRT the city agreed to last year. It will do so with a new report showing that the additional cost to the city would be $1.1-billion. The report does not recommend one project over the other, but raises concerns about the subway option.

The report, issued on Friday by city manager Joe Pennachetti, suggests that about half of the extra money could be generated by a property tax increase. Another $400-million would be sought from Ottawa. The remainder – about $100-million – would be come from development charges.

Mr. Ford has asked the senior bureaucrat for a more detailed financing plan, with every effort to "minimize the burden" on taxpayers. Still, accepting that transit expansion requires new funding is a major shift for Mr. Ford. He has long dismissed all those who said new revenue tools were needed.

"I think it is encouraging that the mayor recognizes that subways cost money," TTC chair Karen Stintz said after Mr. Ford spoke.

The Liberals are already leaning heavily on the subway in their campaign in the Scarborough-Guildwood by-election.

Hundreds of supporters crammed into Grit candidate Mitzie Hunter's campaign office Friday evening for a rally with her and federal Liberal Leader Justin Trudeau.

The loudest applause of the event came when Ms. Hunter promised to push for the Scarborough subway.

She suggested that the $1.8 billion the government was to pay for the Scarborough LRT would also be available for the subway.

"Our government has committed $1.8 billion to this transit expansion for Scarborough and we continue to make that commitment," she said.

Asked why the Liberals changed their minds about the previous light rail plan and embraced a subway, Ms. Hunter replied: "I know, that on behalf of the people of Scarborough-Guildwood, I support a subway, so we can get Scarborough moving."

On Friday, Ontario Conservative leader Tim Hudak blasted Ms. Wynne's Liberals for backing off the plan to build light rail in Scarborough in favour of a subway extension. He called the move purely political, meant to win votes in a by-election in Scarborough-Guildwood.

Scarborough Southwest councillor Michelle Berardinetti said she was pleased the mayor will appeal for funds from the federal government, but questioned Mr. Ford's insistence on a maximum tax hike of 0.25 per cent.

"Given the city manager's recommendations of 1.1 per cent or higher, I don't think 0.25 per cent is realistic," Ms. Berardinetti said, adding she hopes council will back the subway plan next week. She said the 35-9 vote to open the discussion in May is an indication of council's leanings.

"The feedback I've gotten from council colleagues is that they're still on board. Their only question was, 'How do we pay for it?'"

But not everyone was impressed with the announcement. Councillor Gord Perks called Mr. Ford's funding outlook "hot air."

"Nobody sells subways at a 90 per cent discount. The people of Scarborough are going to be riding buses for the next 30 years," Mr. Perks said. He added that regardless of whether the federal government comes to the table, he will cast his ballot for the LRT plan, for which funding is already in place.

"It serves more people. It will have more stations. It reaches priority neighbourhoods and it costs half as much."

Although Metrolinx still officially favours an LRT for Scarborough, a senior source at the provincial transit agency said it has been feeling pressure from the province to be more flexible.

In May, Metrolinx CEO Bruce McCuaig said there was no willingness to delay building an LRT until the debate about a subway had been settled. The change of tone at Queen's Park, though, has been matched by a new message from Metrolinx, which now says it will not build an LRT unless Toronto confirms the agreement signed last year.

Mr. Ford will meet on Saturday with federal Finance Minister Jim Flaherty in hopes of wresting money from Ottawa. And he said that the plan is "dead" if the province will not hand over the entire $1.8-billion originally earmarked for the LRT. But counting on the other levels of government carries risks. Ottawa has not generally been keen to finance urban transit. And Metrolinx has offered only $1.48-billion of the original budgeted amount, leaving an immediate $320-million hole in the plan.

Asked which option he favours, Mr. Pennachetti told reporters it is a decision for council.

The report warned that there has not been sufficient study of the impact elsewhere in the transit system if ridership projections for a Scarborough subway extension are borne out.

The report also notes that a subway to Scarborough would leap-frog past other unfunded transit priorities. That list that includes a downtown relief line to take pressure off the Yonge line by diverting passengers from the east-end directly into the core, a long-planned expansion that could become more necessary than ever if a greater number of people leave their cars at home and take the Scarborough subway.

And the report warns that increased spending on this project could leave other work in jeopardy. "The decision to adopt subway technology could impact the ability to fund other priorities," it points out.