A city report set to go before the Public Works and Infrastructure Committee next week is calling for businesses to offer discounts to those who shop with reusable mugs and shopping bags.

But an organisation that represents restaurants and other food outlets in Ontario is calling the proposals a step backwards in terms of recycling, saying the discounts will place a burden on Toronto businesses.

"In these economic times, we can not afford additional taxes and regulations to be placed on business," says Stephanie Jones, Ontario vice president of the Canadian Restaurant and Foodservices Association.

Jones says the CRFA represents at least half of about 8,000 establishments in Toronto, and the proposed regulations would make it harder for them to do business.

However, Glenn De Baeremaeker, chair of the Public Works and Infrastructure Committee, says he doesn't accept that argument.

"(Retailers) are going to save 20 cents or more if they don't have to give you that cup," De Baeremaeker told CP24.COM. "I'm not too worried about the economics of it."

The Ward 38 Scarborough Centre councillor compares the industry's response to the proposal with how bars and restaurants reacted to the proposed smoking ban several years ago.

"I think every restaurant and bar in the city said they would go bankrupt if Toronto had a no-smoking bylaw," De Baeremaeker says.

"Well here we are...and they're all still open."

The city report, which will be formally presented on Nov. 12 to the Public Works and Infrastructure Committee, aims to have retailers offer at least a 10 cent discount per bag for each single-use plastic shopping bag not used by a customer. Stores would also be required to fill reusable bags provided by the customer.

Likewise, retailers would also be required to offer at least a 20 cent discount off the price of a hot drink served in a refillable mug. The proposals would come into effect in June 2009, if city council approves it during a Dec. 1 vote.

The councillor says that while common paper coffee cups are recyclable, their plastic lids are not. He says the proposed bylaw would push retailers to find alternatives, such as cardboard lids.

"If it can't be recycled, you can't sell it," says De Baeremaeker.

He also says consumers will be rewarded for making green decisions. He says taxpayers will dish out less because it's cheaper to send material to get recycled than to send it to the dump.