A motion moved Tuesday by Coun. John Parker to remove the report from the mayor's committee passed in a 27-13 council vote.
During questioning by councillors on Wednesday city manager Joe Pennachetti said it was important that Toronto give Metrolinx some direction for transit funding or city residents could end up with higher property taxes.
The province's regional transit authority had asked municipalities to report back in the next few weeks with a list of preferred tools, but Mayor Rob Ford's executive committee had attempted to delay a vote until after the deadline.
The tools are needed to generate about $2 billion a year to pay for The Big Move a regional transit expansion plan for the Greater Toronto and Hamilton Area expected to cost $50 billion over 25 years.
In the report released last month, Pennachetti called on the city to support development charges, a fuel tax, parking levies and a sales tax, after polling city residents.
Mayor Ford has said "hell will freeze over" before he supports any proposals cited in the report.
The mayor's brother Coun. Doug Ford said Premier Kathleen Wynne wasn't elected and should consult Ontario residents before imposing new taxes.
"In my opinion she has absolutely no right to go out there and tax the people of this province," Ford said.
The Toronto Transit Commission's CEO Andy Byford said the city's congestion is a problem that's only going to get worse.
"I think Torontonians are fed up with talk and no action. It's time to get spades in the ground," he said.
Speaking on Metro Morning, TTC Chair and councillor for Eglinton-Lawrence Karen Stintz said the issue is too important for city council not to discuss.
“I think it’s very important that Toronto weigh in on the kinds of revenue options the province and Metrolinx might consider when they talk about raising revenue for transit,” she said, adding that Mayor Ford's hardline position "makes it difficult" for the city to play a role in transit planning.
Coun. Glenn De Baeremaeker used discussion about transit funding as an opportunity to move a motion to convert the Scarborough RT Line to a subway.
“We have thousands of people going through that system every single day – the demand exists," De Baermaeker said. “You cannot have taxation without transportation."
De Baermaeker said because council was discussing new revenue tools, they should also consider how that money could be used to upgrade the RT line to a subway.
“It’s about time you bring Scarborough into the equation," said the Ward 38 councillor from Scarborough Centre
De Baermaeker said the upgrade would cost $500-million.
If approved, the province and Metrolinx would be asked to direct funds already dedicated to the RT conversion and "sufficient additional funds" to extending the Bloor-Danforth subway line from Kennedy Station, north through the Scarborough Town Centre, to Sheppard Avenue.