The province would require carbon emissions from transportation fuels to be cut by 10 percent by 2020 -- like taking 700,000 cars from the roads.

"Together, California and Ontario are taking action on climate change and doing our part to lead the world in innovative technologies and policies that would drastically cut our greenhouse gas emissions," McGuinty said.

Schwarzenegger added, "California is reaching out and is trying to get as many partners on board" its carbon dioxide emissions reduction initiative, currently the toughest in North America.

In a speech to the Economic Club of Toronto, the former action hero said: "Despite the disagreements we have with other countries about global warming, I believe the United States is about to go from environmental problem to environmental problem-solving."

"In fact, I believe the United States is the world's best hope for solving the global warming crisis."

"Your neighbor across the border may be late in coming to the front, but we are coming, and when we arrive, what we have lost in time, we will make up in action, in spirit, and in strength."

The state plans to roll back greenhouse gas emissions by 25 percent and an additional 80 percent by the year 2050, and has threatened to sue Washington if it tries to block its environmental initiatives.

The two leaders said Ontario and California also would collaborate on energy efficiency programs, and emissions trading, noting a lack of leadership by federal governments in both countries in these areas.

Canada had agreed under the 1997 Kyoto Protocol to reduce CO2 emissions to 6.0 percent below 1990 levels by 2012, but emissions instead have increased so far by 35 percent.

Environment Minister John Baird has maintained the target, negotiated by the previous Liberal administration, is unattainable.

US President George W. Bush's administration meanwhile has balked at CO2 targets, arguing that no global agreement to reduce greenhouse gas emissions can work unless it includes rising economic powers China and India.

Bush has called for a 20 percent cut in US gasoline consumption over 10 years, but insists human activity is only partly to blame for warming.

Baird proposed cutting Canada's CO2 emissions linked to global warming by 150 megatonnes, or 20 percent based on 2006 levels, by 2020.

McGuinty also pledged 30 million Canadian dollars (28 million US) to support a new cancer stem cell consortium to be headquartered at the MaRS research center in Toronto, which will collaborate with the University of California Berkeley Stem Cell Center.

With Canadian scientists Ernest McCulloch and James Till, who discovered stem cells in 1963, in the audience, Schwarzenegger said: "Our state and this country of Canada, we are as powerful as anyone can ever be on stem cell research."

Later, Schwarzenegger is expected to meet with Prime Minister Stephen Harper in Ottawa to press bilateral trade, before heading to Vancouver for talks with British Columbia Premier Gordon Campbell.

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