Transport Minister Lawrence Cannon said Thursday the government is working towards a "made-in-Canada" solution to reduce the fuel consumption of new cars and light trucks by 2020.

On Thursday it announced that it will launch a consultation process that will help create new rules for fuel economy.

As promised last year, Cannon said Ottawa will begin in 2011 to regulate the fuel consumption of new vehicles. The aim is to at least match U.S. standards by 2020.

"By 2020, the average new vehicle sold in Canada will have a fuel consumption better than some of today's hybrid cars, and produce fewer GHG emissions, than approximately 93 per cent of all vehicle entries listed in the 2008 Fuel Consumption Guide," said Cannon.

In 2006, the combined new vehicle fleet (car and light trucks) average fuel consumption was approximately 8.6 litres per 100 km in Canada.

"The U.S. Congress has recently set an ambitious target of 35 miles per gallon, or 6.7 litres per 100 kilometres, for the average fuel economy of new vehicles sold in 2020," said Cannon.

"Now, we welcome the U.S. goal but are committed to developing a made-in-Canada standard that achieves, at minimum, that target benchmarked against a stringent dominant North American standard."

On Friday, speaking to CTV's Canada AM, Cannon added that the provincial premiers have "an important role" to play in developing a national fuel economy standard for vehicles, and the environment is a "shared responsibility" between the federal and provincial governments.

Cannon also said he intends to write to the premiers to ask them to help determine the fuel economy standard, which he says will be a first in Canada.

The new U.S. regulation is called the Corporate Average Fuel Economy (CAFE) standard but it has been challenged by more stringent proposals out of California.

"For Canada to adopt the CAFE standard, which President Bush supports, means taking the slow lane in addressing climate change," Pierre Sadik of the David Suzuki Foundation told The Globe and Mail. "The California standard means getting to a solution much faster."

Several premiers agree. Quebec's Jean Charest and B.C.'s Gordon Campbell have said they want to move towards the tougher California standard.

"We want to achieve the best standard and reduce as much greenhouse gas as we can in as economically viable way as possible," Campbell said.

"Why we're going to the lowest common denominator is beyond me."

Manitoba has also said it wants to shadow California. But some carmakers say Ottawa's plan may be too ambitious.

"It's not going to be a cakewalk," said James Miller, Senior Vice President of Honda Canada.

"We think the goal that the minister is looking for, if it's 35 miles per gallon and harmonized, is going to be a struggle for all of the manufacturers."

Cannon, speaking at the Montreal International Auto Show, said the government will consult with the automotive industry and environmental experts about ways to improve new car efficiency standards.

George Iny of the Automobile Protection Association said Ottawa's move is a step in the right direction.

"It's very ambitious. The average car in 2020 would be as fuel-efficient as the very best vehicles today," said Iny.

"Our government recognizes that the transportation sector is one of the largest sources of greenhouse gas and air pollutant emissions in Canada, accounting for 25 per cent of all Canada's GHG emissions," said Cannon.

"That's why we are taking action now to make sure that, into the future, we have the most environmentally responsible cars and trucks on Canadian roads."

With files from The Canadian Press and a report by CTV's David Akin