Hundreds of Vancouver residents and business owners packed a community hall in Kitsilano on Sunday to hear Mayor Gregor Robertson's $2.8-billion proposal for a subway line to the University of British Columbia.

Robertson told the standing-room-only crowd that Broadway is North America's busiest bus corridor with 110,000 riders travelling through it a day. And every day, 2,000 riders are left behind at bus stops because the buses are full to capacity.

The mayor says a new report by KPMG suggests Vancouver is growing faster than was anticipated three years ago and that a "rail-based line" is necessary to support the population growth and economic potential.

Robertson is proposing to burrow a tunnel between Commercial Drive and the University of British Columbia, through Point Grey.

"The research has validated this approach will minimize impact on community, provide best support and support quality of life economic outcomes that we deserve," Robertson told the crowd.

Robertson says a subway line is the only way to go and, with the provincial election in May, now's the time to get the province to act and have the federal government help out with funding.

Business owners push for tram

But some in the community are calling for other solutions. Donna Dobo, who owns Just Imagine Fun Clothing on Broadway, was one of the people at the meeting calling for a street-level tram line instead.

"The subway takes the people off the street, so for businesses it's obviously not a good thing. Also the stations are so far apart, so it doesn't really help the businesses in between, as we've seen on Cambie," said Dobo.

Metro Vancouver already has three rapid transit lines. (CBC)

She added the cost of building a subway is very high, while a cheaper tram would leave funds for transit investments in other parts of Metro Vancouver.

Dobo also noted the construction of the Canada Line along Cambie was very hard on local businesses and she does not think the small businesses along Broadway would survive similar interruptions.

City Coun. Geoff Meggs says they've consulted with local businesses about the plan and notes, "I don't meet anyone who doesn't believe there's a need for rapid transit."

"Last year council went on record as supporting this Broadway subway tunnel option. We now have the business case much better supported by the KPMG report and I think we're getting better uptake from local businesses who are raising concerns about what would be negative for them."

But local resident Valerie Clark says there are other options for getting people out to UBC, such as adding more cross-town buses along other major thoroughfares.

"Why aren't we putting more buses on 4th, 25th and 16th? I've taken buses a lot ,and that 25 comes every half hour," Clark said.

In 2010, TransLink laid out six options it was considering for a new East-West rapid transit line in Vancouver including an upgraded bus system, a streetcar line, and a SkyTrain extension running along West Broadway to UBC. Alternative routes included a streetcar line along the south side of False Creek and a combination of a trolley line and a SkyTrain extension.

Any proposal for a new rapid transit line in Vancouver would likely have to compete with demands from other regional mayors to extend rapid transit service from Surrey to the Fraser Valley.

With files from the CBC's Justine Ma