The City of Winnipeg said it needs the province's approval to use funds from a proposed transit rate hike to pay for a rapid transit line.

But, the province said that's not the case.

On Wednesday, city council approved a 25 cent increase in transit fares, with the bulk of funds from the increase slated to go towards the city's share of costs for the expansion of a rapid transit line from Jubilee Avenue to the University of Manitoba.

But, city officials said they first need provincial approval because the province funds half of transit's operating costs.

The province disagrees with that notion.

"The province doesn't have to approve it. We've got a 50-50 transit agreement with them. That covers the operating costs with the City of Winnipeg, but this is not something that has to be rubber stamped," said Ron Lemieux, the province's minister of local government.

But the city's mayor maintains the province could have an influence on whether the funds from the transit hike go towards rapid transit.

"They could decide to claw back 50 per cent of that increase and put it into their general revenue," said Mayor Sam Katz.

That would mean not enough cash on hand to build the next phase of the rapid-transit plan, he said.

But critics of the transit hike are raising other questions.

"Why are only transit users being asked to pay?" asked Paul Hesse from the Winnipeg Rapid Transit Coalition.

He said there has to be more consultation on a way to fund it.

"It's inequitable…It's without warning. It hasn't been discussed," said Hesse.

The increase would bring regular transit fares to $2.65 per ride, which is still below the national average of $2.81.

Some transit riders said the hike should just go ahead.

"It's in line with what other major cities are paying and whatever facilitates getting rapid transit on the go - I think it's about time we did something," said Katherine Keeting, a transit rider.

On Wednesday, however, other transit riders voiced concerns over the rate increase.

The mayor said he is open to raising cash another way. A working group with city and provincial officials is set to meet next week to discuss it.

Ron Lemieux hinted that group could find a different funding source.

"Give them a chance to do their work and have a chance to talk to city officials along with the province see where were going," said Lemieux.

- with a report from CTV's Jeff Keele