Bowing to growing pressure from consumers and Canadian Tire over its eco-fee scheme, the Ontario government is killing the latest round of controversial charges on potentially toxic household products and going back to the drawing board.

Sources said Environment Minister John Gerretsen will announce Tuesday that the policy is being retooled — less than three weeks after the fees from embattled recycling agency Stewardship Ontario kicked in on thousands of household items from cleaners to fire extinguishers.

“The government will be looking at solutions to the concerns heard from Ontarians about the program that would ensure household hazardous waste continues to be diverted from our landfills, while ensuring that Ontario consumers are protected,” said a government source.

It was unclear whether retailers and manufacturers would still have to pay the eco fees to Stewardship Ontario — or whether they would get the same break as consumers.

The move came after senior government officials spent the weekend looking at options from banning the fees outright, scrapping and retooling them, or taking the responsibility away from the independent but government-regulated Stewardship Ontario and running the program directly, another source said.

No time line was set for revamping the fees, which took consumers by surprise when they kicked in July 1 along with the new 13 per cent Harmonized Sales Tax. Some retailers faced difficulty in calculating the fees and applying them to products, resulting in some shoppers being overcharged.

“The only question is what does the fix look like?” said one industry representative.

The government’s about-face comes after Canadian Tire announced Monday that it was scrapping eco fees on 8,700 items in its stores, saying the recycling charge is too confusing for customers.

“We are pleased Canadian Tire has made this decision,” Gerretsen’s office said in an email to the Star.

The move from one of the country’s leading retailers “is just further proof of the chaos at cash registers across the province and that Dalton McGuinty’s eco tax plan has been a disaster,” said Progressive Conservative Leader Tim Hudak, who has pledged that a Tory government would kill the fees outright.

Canadian Tire had asked Stewardship Ontario and Gerretsen to take the controversial eco fee program back to the drawing board and come up with a replacement that makes more sense.

“Safely recycling toxic materials like rust remover or camping fuel is important so we don’t have toxic waste seeping into our landfills and environment,” Mike Arnett, president of Canadian Tire Retail, said in a letter to customers Monday.

But the company “can no longer support passing along a recycling fee to customers that has inconsistencies between products and is difficult to explain.”

For example, different bottles of bleach can have different eco fees depending on their ingredients and Ph level. And the rules required the eco fee on a boater safety kit including a bailer, whistle and waterproof flashlight be based on the total weight of the kit, not just the flashlight and its batteries to which it actually applied, Arnett added in an interview.

“We’ve come across some things that don’t seem to make sense,” he said. “Because these eco fees are based on ‘materials’ instead of ‘products,’ it means that two similar brands of cleaning products could have two different eco fees depending on slight variations in their ingredients.”

After Canadian Tire’s announcement, Stewardship Ontario said it will require “prior disclosure” under which companies making or importing products subject to the eco fees provide the agency with information on the fees they’re charging for validation and display on the Stewardship Ontario website.

Canadian Tire’s decision ratcheted up pressure over the program that has some retailers adding eco fees of up to $6.66 to the price of some products — such as hand sanitizers, fertilizer, bleach and fire extinguishers — to defray the costs of disposing them at the end of their life cycle.

The company last week apologized to customers for mistakenly charging higher than authorized eco fees because of difficulties translating the Stewardship Ontario regulations to actual products.

Those problems proved a lightning rod for complaints about the eco fees, which increasingly became a political headache for Premier Dalton McGuinty’s Liberals, who earlier this year scrapped a controversial new sex education curriculum and pulled it back for a revamping as well.

Stewardship Ontario apologized to consumers on Friday for confusion over the eco fees but shot back at Gerretsen for publicly “tarnishing” the agency with a letter earlier in the week demanding an audit and compliance program for retailers when that is beyond the agency’s scope.

Information technology staff at Canadian Tire were working overnight and into Tuesday to eliminate the fees from computer systems at the company’s stores across the province.

Star readers have also written about confusion with the new fees, such as C. Powell of West Hill, who pleaded in a letter to the editor on Saturday: “Mr. McGuinty, if as you say eco fees are to encourage recycling, please advise me how do I recycle fertilizer after spreading it on the lawn?”

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Along with Home Depot, Canadian Tire has been one of few big retailers charging the fee, with others like Wal-Mart Canada Corp., Loblaw Cos. Ltd. and Shoppers Drug Mart absorbing it for now instead of passing the cost on to consumers.

For example, Shoppers has been assessing the fees while Loblaw stores were charging them only on compact fluorescent light bulbs and tubes.

Home Depot and Wal-Mart officials did not return calls from the Star on Monday.