OTTAWA (Reuters) - In a landmark decision that environmentalists hailed as "a great step forward" for the health of Canadians, the country's Supreme Court ruled on Thursday that municipalities across Canada have the right to ban the residential use of pesticides.

The court said the leafy Montreal suburb of Hudson -- in the French-speaking province of Quebec -- had been within its rights when in 1991 it became the first Canadian municipality to outlaw the use of pesticides on lawns.

Crucially, the court also said the Quebec legislation that Hudson used to implement the ban was very similar to laws in many other parts of Canada. In effect, this gives local authorities all over the country the right to follow suit.

"We're thrilled. We've had municipalities across Canada just waiting with their fingers crossed for this decision," said Angela Rickman, head of the pesticide reduction campaign at the Sierra Club of Canada environmental group.

"A number of other communities will now be able to move ahead without worrying about negative financial consequences. I think it's a great step forward for the health of Canadians," she told Reuters.

Some 36 other Quebec towns, as well as the city of Halifax, Nova Scotia, have enacted similar bans since 1991.

Opponents say pesticides can affect the brain and nerve development of children, can block or mimic natural hormones and can harm household pets.

Landscapers disagreed, saying a judicious use of pesticides should be allowed. The case was brought to the Supreme Court by two Quebec lawn-care companies, who said Hudson had been wrong to block the use of chemicals that had been approved by federal and provincial authorities.

The court disagreed, saying in a unanimous decision that "our common future, that of every Canadian community, depends on a healthy environment."

Municipal authorities are closest to the everyday lives of citizens and most responsive to their needs, it added.

"Based on the distinction between essential and nonessential uses of pesticides, it is reasonable to conclude that the town bylaw's purpose is to minimize the use of allegedly harmful pesticides in order to promote the health of its inhabitants," it said.

The 1991 Hudson bylaw did not apply to farmland and gave golf courses a five-year exemption.

Officials at the two lawn-care companies at the center of the case said they were studying the court's decision and maintained the ban was discriminatory.

"The whole industry has made a collective effort to fight the discriminatory by-law, which, by its nature, targets the lawn-care industry in Hudson," the companies Services des espaces verts and Chewlawn said in a statement faxed to the companies argued that the Supreme Court ruling should not apply to other provinces because it was only a local matter.

The court noted the Quebec legislation was very similar to laws in such powerful provinces as Ontario, Alberta and British Columbia, as well as in Nova Scotia, New Brunswick, Manitoba and two of the three Arctic territories.

Rickman said Canada's regulations on pesticides use are outdated and urgently need to be changed.