City council will have to agree next week to hiking taxes across the entire city in a bid to build a subway to Scarborough.

City manager Joe Pennachetti rolled out a report Friday outlining council’s two choices when it comes to replacing the Scarborough RT.

Council meets starting Tuesday to debate whether to reaffirm its support for the fully-funded Scarborough LRT or push ahead on a risky and costly plan to extend the Bloor-Danforth line into Scarborough.

While Pennachetti doesn’t recommend either plan for council’s endorsement, his report points out the subway extension would cost between $1 billion and $1.5 billion more than the LRT and rely on a 1.1% to 2.4% property tax increase over three years, the province still providing the $1.8 billion it had committed to the LRT and appealing to the federal government for more cash — between $418 million and $660 million.

Mayor Rob Ford — who meets with federal Finance Minister Jim Flaherty Saturday and provincial Transportation Minister Glen Murray Monday — came out in support of a 0.25% tax hike to fund the subway.

Ford stressed Scarborough residents want subways and was optimistic council would agree.

“I believe it is going to get through (council),” he said Friday. “Now if they don’t, if they go with the LRT — that’s not what the people of Scarborough want, they’ve been loud and clear. I can’t control how they vote, I encourage them to support the subways and I’m sure everyone will be happy at the end of the day.”

The mayor said he’s a “true believer” in the subway plan and pointed to his experience at Ford Fest Scarborough held last week.

“Not one person came up to me and said they wanted LRT,” Ford said. “Thousands of people were chanting subway, subway, subway - it’s what the taxpayers want.”

Councillor Gord Perks said Ford was rejecting the city manager’s plan by not committing to the full tax hike.

“So there is no plan for funding a subway,” Perks said. “There is no such thing as a discount subway shop.”

Comparing the two options, city officials pointed out an LRT would cover a larger geographic area, include seven stations and come at a lower cost while a subway extension, with only three stations, would have higher speed, higher quality service, higher ridership and no transfer for passengers from one mode to another at Kennedy station.

But the report warns diving into the subway project adds to the city’s debt and could push back higher priority transit projects and other capital projects.

TTC chair Karen Stintz was optimistic the plan outlined by the city manager’s report would secure “the right subway” for Scarborough.

“I think council is in the position to finance this construction over the next 30 years,” Stintz said. “I think it is encouraging that the mayor is recognizing that subways cost money and that the taxpayers might have to pay for subways in the city.”

Stintz said she expected the province to honour its commitment to providing the $1.8 billion for a replacement to the Scarborough RT and that the project would be eligible for federal infrastructure funding because it would be considered a new project.

Councillor Josh Matlow argued the subway push defied pro-taxpayer logic.

“(The report says) taxes would have to go up and the city would go dangerously into debt to pay for a plan that doesn’t make sense,” Matlow said.

“It would serve fewer Scarborough residents, cost a billion dollars more and when it comes to it — either a subway or an LRT would be completely grade separated — so I don’t see why’d we spend a billion dollars more to do that.”

Matlow argued this isn’t the LRT versus subway debate the city plunged into last year.

“This is about what makes sense on this specific route,” he said.

“If you look at the evidence, a reasonable person concludes, that it’s not worth a billion dollars of higher taxes and deeper debt to pay for it.”