A new report by City Manager Joe Pennachetti is advising that if the city wants to build a subway in Scarborough, it will need to raise taxes by 1.1 to 2.4 per cent over the next three years.

The report further advises that council commit to a minimum tax increase of 0.5 per cent in 2014 if it wants to build a Scarborough subway.

Those recommendations are part of a report outlining two options the city could move forward with in Scarborough: sticking with a plan to construct a light rail line; or extending the Bloor-Danforth subway line into Scarborough instead.

Pennachetti undertook the report last week at the request of Mayor Rob Ford after Metrolinx requested clarity on Toronto’s support for the LRT plan.

Reacting to the report, TTC Chair Karen Stintz told CP24 the recommendations will force council to decide whether it wants to pay for subways.

"If we’re going to build a subway we have to find a way to pay for it and that’s the crux of what council will be debating next week when this issue comes before us," Stintz said. "Every other time we’ve debated subways, we’ve never talked about a way to pay for them. Now we’re going to have to decide as a council whether or not we want to pay for a subway to Scarborough."

The report comes amid a growing political appetite to proceed with subways instead of light rail lines in the east end of the city.

On Thursday Transportation Minister Glen Murray indicated the Liberal government is open to the idea of a Scarborough subway, but must have a clear indication from the city on the matter.

Murray’s comments came as an about-face for the Liberals, who previously said they would stick to the LRT plan, despite the objections of Mayor Rob Ford, who campaigned on subways in 2010 and has consistently said that Torontonians want subways instead of LRT’s.

Last year the city, TTC and regional transportation agency Metrolinx approved an $8.7 billion light rail plan for the city, including a light rail line to replace the ageing Scarborough Rapid Transit line.

But in May council voiced support for extending the Bloor-Danforth subway line from Kennedy Station to Scarborough Centre and Sheppard Avenue instead.