Toronto's Sheppard subway line could be mothballed and transit riders could be hit with a 25-cent fare hike this October due to budget constraints at city hall, officials warned on Thursday.

The Toronto Transit Commission (TTC) could also scrap 21 surface routes, including the 26 Dupont, 67 Pharmacy and 120 Calvington routes.

"This is extremely traumatic," city councillor and TTC chair Adam Giambrone TTC told reporters. "There will be dramatic affects on everyone that uses the TTC."

Calling it "the darkest day in transit in the last decade," Giambrone said the TTC has to chop $30 million from its budget for this year and another $100 million next year.

He has called an emergency commission meeting for Friday afternoon to discuss ways to cope with the cuts.

The Sheppard subway could be closed entirely by the end of this year or the beginning of next year, Giambrone said.

Chopping the surface routes could save $1 million this year and $10 million next year, he added. The service halt isn't expected for at least a few months.

The 6.4-kilometre line cost $1 billion to build. It received a warm reception when it opened nearly five years ago, but ridership has dropped off.

"It is one of our least performing routes," Giambrone said.

Only about 40,000 commuters use the Sheppard line each workday, which is fewer than the number of passengers on the Dufferin bus route.

Thursday's development is a big blow to the TTC and commuters, and comes at a time when ridership has soared.

Mayor David Miller this week ordered spending within public service departments to be tightened and warned of large cuts to city services after two proposed taxes were deferred until after the October provincial election.

The proposed land transfer tax and vehicle registration fee would have raised $350 million for cash-strapped Toronto.

The city faces a potential $575 million budget shortfall next year.

After the tax proposals were deferred, Miller said residents could be facing property tax increases of up to 10 per cent next year.

But the mayor never made any specific threats of service reductions before Monday's tax vote. Critics accuse him of fear mongering, only threatening to cut vital services after losing a critical vote.

"It appears that this is an approach to scare people, that this is the only answer, and it shows a lack of creativity and a lack of innovation," said Councillor Denzil Minnan-Wong.

But Miller says the service repercussions are real. He and Giambrone say the downloading of services from the province has crippled Toronto.

"These are planning tactics. We don't have the room to manoeuvre anymore," Miller said.

"For a decade, the city has created budgets in the face of downloading by manoeuvring. We don't have that room to manoeuvre now."

Miller said the last time the TTC suffered cuts, it took the transit system 10 years to recover.

Transit riders were considerably angry after learning of the possible shutdown.

"It's a bad idea to shut it down. How would people get around? Not everybody drives," said one woman.

"That's the only way for me to get to work at a somewhat cheap rate," said another woman. "Other than that I'd have to take a taxi and wouldn't really be able to afford to do much else in the city."

With reports from CTV's Desmond Brown, Paul Bliss and Janice Golding