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Toronto police chief Bill Blair is photographed in his office at police headquarters in Toronto, Ontario, Friday December 27, 2013.Kevin Van Paassen/The Globe and Mail

Toronto Police Chief Bill Blair, who won praise early in his tenure for community outreach but fell out of favour over the G20 protests and became embroiled in the Rob Ford saga, will not serve a third term as head of the country's largest municipal police force.

In a surprise move on Wednesday, the civilian oversight board for the Toronto Police Service rejected Chief Blair's request for a contract extension. He will finish his term in April, 2015, making him one of the longest serving chiefs in Toronto's history at 10 years.

Chief Blair was at his cottage northeast of Toronto when he learned his fate around 12:30 p.m. Board chair Alok Mukherjee telephoned him when the special three-hour board meeting finished.

Chief Blair was surprised, according to a close source. Not that the board had denied him a third term – he knew at least three of the seven members wanted him gone – but that the decision was so quick.

The source said the board voted for change not because of the controversies, but because of Chief Blair's reluctance to modernize and overhaul the force.

An old friend of Chief Blair's said the chief had indicated in recent weeks that he wanted to stay on.

The chief had until last Friday to let the board know whether he wanted to continue after his contract was up. There was some speculation at headquarters Mr. Blair planned to retire, but come Friday afternoon, a short letter arrived at the chair's office. He wanted to keep his job, after all.

Few on the force – including, apparently, Chief Blair – seemed prepared for the snap verdict. The board had 30 days to think about it.

The quick timeline indicates the board hopes to choose a replacement before the next city council is sworn in this December. One hiccup in that plan, said a source familiar with the discussions, is that the board is interested in attracting international candidates. That would mean a longer, more complicated, search and approval process.

But, the source said, the view is that only someone from the outside could implement the kind of change needed.

Mr. Mukherjee refused to discuss the board's vote, saying only that it was difficult.

"It was not a decision against Chief Blair. It was a decision about what's the best way to move forward for the city," he said.

A source said that after a vigorous debate, a clear majority opted to look for new blood.

Toronto's police board chose Mr. Blair originally because of his commitment to diversity. At the time, the service was plagued by allegations of racial profiling. Nearly 90 per cent of new hires were white men. By the end of Mr. Blair's first term, women and minorities made up 40 to 60 per cent of recruits. He also caused waves by acknowledging racial bias on the force. His predecessor, Julian Fantino, had vehemently denied the possibility.

In 2009, when members of Toronto's Tamil community staged a four-day demonstration that shut down one of the city's major thoroughfares, infuriating commuters and some residents, Chief Blair resolved the standoff without injury or rioting.

But by the next summer, tensions began to emerge between the chief and his board. It began with the G20 summit. After a small group known as the "Black Bloc" torched police cruisers and smashed shop windows, the service implemented extreme measures on all demonstrations, at one point detaining more than 1,000 peaceful protesters. The Office of the Independent Police Review Director, a police watchdog, found some officers used excessive force.

The board felt the chief did not properly consult his civilian overlords during the summit. The chief felt the board was overstepping its role. Day-to-day operations were not part of its mandate.

Over the next few years, the relationship between the chief and the board worsened, sources say. The chief and the chair began meeting less frequently. Resentment built up on both sides. The last straw was money.

The Toronto police budget is edging up on $1-billion, the largest item of city spending. Since 2011, the board has pressed the chief to overhaul the way the force operates, including outsourcing some administrative functions, cutting back the number of senior officers, and re-evaluating whether some jobs could be done by cheaper, civilian employees.

The chief promised to take on the task, but sources said the board felt that after two years, he had not made significant headway.

Toronto Councillor Michael Thompson, the board's vice-chair, told The Globe and Mail earlier this year there was "no way" he could support extending Chief Blair's contract, indicating he did not think he had done enough to control costs.

On top of the budget strife, the chief found himself at the centre of a controversy last October when he announced officers had recovered a video of Mr. Ford smoking what appeared to be crack cocaine.

At the news conference, Chief Blair said he was "disappointed" at what it showed.

Mr. Ford and his brother, Councillor Doug Ford, accused the chief of being political and called for his resignation.

Mr. Mukherjee said the Fords had nothing to do with the decision. An insider said if anything, Mr. Blair's leadership in ordering the investigation of the mayor was redeeming.

Long-time friend and former Toronto deputy chief Kim Derry said Chief Blair had for several years talked about staying at the helm beyond the spring of 2015, as recently as a week or two reiterating that desire.

"He said he was still going forward to renew, and I said, 'You know what, maybe it's time to turn over a new leaf, or rest and just enjoy life,'" recounted Mr. Derry, who has been close to the chief for four decades and retired as deputy in 2011. "And he said, 'You know what? I just want to continue.'"

Mr. Derry was in the United States and had not yet spoken with Chief Blair about the board's decision, but said his friend is likely saddened. "He'd be disappointed, but he also knows that the next phase of his life could be private enterprise or relaxation with grandchildren," he said. "He's got a lot of options."

A look at the board:

The Toronto Police Services Board that ultimately opted to replace Chief Bill Blair with a new face at the helm includes several members who have been critical of increases in police spending. Here a look at the board's seven members and what they've had to say about the chief in the past:

Alok Mukherjee

Chair of the Toronto Police Board for nearly a decade, Mr. Mukherjee has been outspoken about the need to curtail the police budget. A human rights activist with a lengthy career in public service, Mr. Mukherjee has led the board through some of the most turbulent moments of Chief Blair's tenure, including the G20 riots and the investigation into Mayor Rob Ford. He said none of those incidents played a role in the board's decision not to renew the chief's contract.

Michael Thompson

Mayor Rob Ford selected Councillor Thompson as his representative on the board in 2010. The board's vice-chair, Councillor Thompson said earlier this year there was "no way" he'd support extending Chief Blair's contract, citing the chief's inability to contain costs. He recently dropped a lawsuit against the board alleging he was being censored for his critical comments of the chief.

Andrew Pringle

Mr. Pringle's relationship with Chief Blair came under scrutiny last year when Councillor Doug Ford accused the two of being too friendly because of a fishing trip they took together in 2012. Mr. Pringle, former chief of staff to mayoral candidate John Tory when Mr. Tory was leader of the Ontario Progressive Conservative Party, denied there was a conflict of interest and later recused himself from board discussions about the Fords as he is raising money for Mr. Tory's campaign.

Dhun Noria

Dr. Noria was one of two board members who took issue with Councillor Thompson's critical comments of Chief Blair, according to court documents. Speaking out against allegations that the board was too closely aligned with the chief, Dr. Noria said she and her fellow members constantly question and hold the chief accountable. She has praised Chief Blair in the past and rejected the notion he has a political agenda. The two-time breast cancer survivor is well-known for her philanthropy.

Mike Del Grande

Once an ally of Mayor Ford, Councillor Del Grande rejected an independent review of the city's policing needs last year that called for more officers, saying, "The chief should not have his hands in it." Councillor Del Grande won't stay on the board after his term expires in December, as he is not running for re-election.

Frances Nunziata

The City Council Speaker is a Ford ally who has fought against police spending increases, rejecting Chief Blair's past warnings that budget cuts will mean layoffs. Ms. Nunziata served as Mayor of York prior to amalgamation.

Marie Moliner

A lawyer and the Ontario regional executive director of the Department of Canadian Heritage, Ms. Moliner was the second board member to find Councillor Thompson's comments about Chief Blair's contract renewal problematic.

With a report from Kathryn Blaze Carlson and Sahar Fatima