The Toronto council has approved a by-law that will impose a 5 cent tax on plastic bags and will ban the sale of bottled water in civic buildings as of June 1st 2009. The CBC has a good article on this by-law.
Toronto does not get enough kudos for its green legislation. It is definitely the most forward thinking large city in north america with regards to greening themselves. This has been partially imposed by severe restrictions on landfill space which forced the segregation (recycle, compost, waste) and reduction of waste. But, the city has kept the green momentum going through projects such as the water cooled office towers, bike paths and now plastic bags.
This is a bold by-law by north american standards, but many european cities and regions have already banned plastic bags. We will see what city councillors pull out of their hat next.