The mayor of St. Clair Township says CF Industries has a $105-million urea plant expansion at its Courtright facility on hold.
Steve Arnold says it's because of the Kathleen Wynne government's cap and trade program to come into effect January 1.
Work on the expansion was set to begin this summer.
"One of the issues is that CF is not being recognized for the things they've done to mitigate their environmental footprint, things like their waste streams going into the greenhouse process on site," says Arnold. "And yet, when people are looking at them and trying to evaluate them for cap and trade, they're not being recognized for the great efforts they've done."
Premier Wynne was on hand, in person, in June of last year, when the expansion was announced, saying the project was a vote of confidence in Ontario's chemical industry.
Mayor Arnold is worried the company could leave the province and expand production at its American facilities instead.
Ontario's cap and trade program is designed to help fight climate change by setting limits on greenhouse gas emissions and rewarding businesses that reduce their emissions.