City council's executive committee voted Monday to cancel Toronto's required five-cent plastic bag fee as of July 1.
The decision came after Mayor Rob Ford said during his Sunday radio program that the fee has served its purpose and should come to an end.
The bag fee was introduced in 2009 as a way to cut down on single-use plastic bags, while promoting the use of reusable bags.
Since the fee was introduced, shoppers have cut their plastic bag usage in half.
Ford addressed the plastic bag fee during his successful mayoral campaign in 2010, calling it an example of an unnecessary tax and questioning where the proceeds went.
The $5.4 million generated by the five-cent fee remains in the hands of retailers, not the city.
The executive committee motion that passed Monday calls for the city to encourage retailers who still charge the fee to voluntary donate a portion of the profits to a tree canopy restoration program.
The motion also included an amendment suggesting retailers use signs to display how much money they've contributed to the tree canopy program.
The motion must now be put to a full council vote on June 6.