A massive rise in firecracker permit fees could spark a legal challenge to the law governing explosives and fireworks displays.

The Chamber of Commerce has warned that an ACT government decision to raise the fees for fireworks and explosives permits could push small businesses to the wall.

The changes increase the fireworks permit fees from $18 to $989, causing the cancellation of some theatrical and wedding displays.

Harold Upton, the former owner of Fyshwick-based ACT Fireworks, said on Thursday that the increases could lead to a legal challenge of dangerous substances regulations.

''I'm considering some [Administrative Appeals Tribunal] and constitutional challenges,'' said Mr Upton. ''The advice I've got is that the legislation, when it was enacted in 2004, was unconstitutional. They've since amended it, but it doesn't make it correct.''

Mr Upton lives in Adelaide but returns regularly to the ACT and said he was considering conducting more fireworks displays in Canberra.

He suspected the fee increases were part of an anti-fireworks agenda that led to the cancellation in 2009 of exemptions that had allowed Canberrans to hold backyard firecracker displays during the Queen's Birthday long weekend.

The exemptions were revoked because of public safety and animal welfare concerns.

Mr Upton said the fee increases could make fireworks displays too expensive for small community events.

''At the very least they should waive the increase for community events like the Tuggeranong Festival,'' he said.

Local explosives businesses have also criticised the fee rises.

The increases are a ''disallowable instrument'' that could be blocked by a majority vote of the Legislative Assembly.