Toronto Deputy Mayor Doug Holyday says he would be opposed to funding the Pride Parade if the activist group Queers Against Israeli Apartheid marches, despite a staff report that says their participation does not violate the municipality's anti-discrimination bylaw.

Holyday said Wednesday he supports funding Pride Week, the largest celebration of sexual diversity in Canada.

"If they want to go out and have a good time and celebrate their gayness, that's up to them, and that's been an acceptable expense for the city. We've contributed to that. It contributes to tourism and so on," he told reporters.

"But when they're using that money to make some political points and to put people down, we're not into putting our money up for that, as far as I'm concerned."

When asked specifically by a reporter: "So you wouldn't fund Pride if this group marches?." Holyday replied: "Right."

Coun. Giorgio Mammolitti, who sits on council's powerful executive committee, said he would move a motion that will call for the withdrawal of funding if Queers Against Israeli Apartheid (QuAIA) marches in Pride.

"This is about hatred," he said. "I think that most people don't want tax dollars going toward spreading hatred."

Decision should not be based on participation of group: report

The comments by Holyday and Mammolitti came after city manager Joe Pennachetti said in a report released Wednesday morning that concluded the term "'Israeli Apartheid" does not violate the city's anti-discrimination policy.

He concluded that the phrase does not violate either the Criminal Code or the Ontario Human Rights Code.

The staff report also says funding for Pride should not be contingent on the participation of QuAIA.

"While council clearly has the ability to choose whether or not to fund an event of this nature or this aspect of the Pride Festival event, that would be a decision which should be made based on the nature of the Parade itself, not the participation of a single group," the report said.

Mayor Rob Ford has argued against funding Pride, which received $123,807 in city dollars last year, if QuAIA is allowed to participate.

Council's executive committee will consider the report when it meets next Wednesday and determine what is to be done with the recommendations.

CJC disputes report findings

The report was requested by council last July after a simmering controversy over the inclusion of Queers Against Israeli Apartheid in last summer's parade. Jewish advocacy groups and some mayoral candidates sharply criticized the decision to include the group in the July 4 parade.

Bernie Farber, the president of the Canadian Jewish Congress, said Wednesday his group "strongly disagrees" with the report.

"The comparison paints anyone who supports the Jewish State of Israel, namely Jews, as supporters of racist regimes, and thus as racists themselves," he said in a statement. "Using the Criminal Code of Canada and the Ontario Human Rights Code as the basis for this decision is employing too narrow a standard."

But Francisco Alvarez, the co-chair of Pride Toronto, the group that runs the parade, said the report "confirms what we always believed, which was that there was no legal basis to exclude this group from our parade...Our mission is to provide a platform for different individuals and groups from the community to say whatever it is they want to say."

Alvarez said Pride Toronto has created an independent committee to handle all complaints about controversial groups who wish to participate in the parade.

QuAIA claims Israel has an "apartheid system" that extends gay rights to only some people, and that the country's treatment of Palestinians constitute apartheid. Jewish groups have dismissed that assertion as inaccurate and call the group discriminatory.