City council is hoping to salvage funding for turning Terwillegar Drive into an expressway after losing a provincial transit grant.

Some of the cash for work on the southwest artery, along with several other projects such as Stadium LRT station upgrades, was expected to come through the Alberta Community Transit (ACT) Fund, which was axed in the provincial budget last month.

It amounts to a loss of about $89.3 million, of which $24.6 million was earmarked for Terwillegar.

The prospect of not moving ahead with the long-anticipated upgrade as planned was a sour one for Coun. Tim Cartmell.

"This is an important project, and it's going to have to trump some other projects in the city," he told reporters.

However, ACT relied on municipalities contributing to the projects, so Mayor Don Iveson asked administration Tuesday to reprioritize the list of city projects to try to find a way to save Terwillegar and other ventures, including Stadium station, if possible.

"I ran on doing something about Terwillegar and campaign promises mean something to me," Iveson said.

City council is looking for savings in the wake of last month's provincial budget, which saw the city lose millions in expected infrastructure grants, as well as the end of the city charter agreement inked with the previous government.

At the time, Iveson admonished the United Conservative Party for "ripping up" the charter and for breaking campaign promises.

The motion to save the Terwillegar project followed city administration's warning to council that it will need to make significant adjustments to its four-year budget penned in 2018 if it wants to avoid raising taxes more than is already planned.

Administration plans to bring back more details ahead of council's budget deliberations scheduled for December, but said among possible options are city layoffs, reducing services and cutting funding for community partners.

In an effort to start to trim, councillors withdrew a number of motions tabled last year for projects they hoped to secure funding for this year, from topping up cannabis funding for police to upgrades at Valley Zoo to an urban tree canopy project.

'Economic emergency'

Following the budget presentation, Coun. Jon Dziadyk asked council to declare an "economic emergency."

"We can no longer hide from the reality that our debt is burdening our prosperity," he said. "We do not need to return to the austerity of the 1990s, but we cannot continue with the indulgences of our current habits."

The motion was not warmly received by other councillors, with some saying they were offended by the suggestion.

Coun. Tony Caterina called the premise of Dziadyk's motion "idiotic."

The veteran councillor said this isn't the first time the city has faced a difficult financial situation and the challenge is not lost on anyone on council or in administration.

"The implication here is that we're going to make stupid decisions unless we declare an economic emergency, which makes no sense whatsoever," Caterina said.

The motion failed.