Premier Doug Ford says the Ontario government will remove the cost of the now-repealed cap-and-trade system from natural gas bills.

Ford says the change means families will save $80 a year and small businesses will save $285 annually.

He says the government has issued a directive to the Ontario Energy Board that will see the price of natural gas reduced by 3.3 cents per cubic metre starting on Oct. 1.

The Tory government cancelled cap-and-trade last month and has launched a court challenge of Ottawa's ability to impose a carbon tax on the province.

Shortly after winning the spring election, Ford said his government would provide clear rules for an "orderly wind down" of cap-and-trade.

The premier has said that cutting the carbon pricing system will help him lower gasoline prices for vehicles by 10 cents per litre.