Toronto City Hall is considering a household garbage tax that would cost residents a monthly fee based on the amount of trash being tossed.

Versions of the proposal suggest the city would hand out standard garbage bins and charge a pick-up fee.

The report calls for residents to choose a small, medium or large waste container. Their bill would be based how much garbage they produce.

"If you produce a lot of garbage, you have to pay more," Mayor David Miller told reporters on Tuesday afternoon.

Miller said the strategy is based on successful models in Vancouver, Seattle and San Francisco.

The garbage fees would be mailed out separately, such as water bills.

The trash tax, which Miller called an "environment fee," could raise millions of dollars each year and result in lower property taxes.

This year's residential property tax increase will be 3.8 per cent, if the budget is approved.

Miller says the garbage fee proposal would be an incentive for residents to recycle more.

"People want to do the right thing for the environment," he said. "They've taken to the green bin."

Councillor Adam Vaughan supports a new garbage plan.

"The more effective you are at recycling and the less garbage you generate, the less chance you'll incur a fee or a tax for the garbage you put at the curb."

But Councillor Denzil Minnan-Wong slammed the idea, and said Miller is becoming a "taxaholic."

The mayor has set a goal to increase the waste diversion rate to 70 per cent from the current overall rate of 40 per cent over the next four years.

With a report from CTV's Desmond Brown