OTTAWA - The Canadian and American governments announced a deal late Thursday to work toward a North American fuel-consumption standard for vehicles.

The agreement announced by Transport Minister Lawrence Cannon and his U.S. counterpart Mary Peters at a meeting in this southern Arizona city is the first step toward a so-called Clean Auto Pact that would set a tougher limit on gasoline consumption in both countries.

The fuel consumption pact comes as the Conservative government unveiled an environmental plan Thursday that it says will cut greenhouse gas emissions and improve air quality. The plan affects everything from the efficiency of household dishwashers to the carbon dioxide emissions of the oilsands under new regulations aimed at cutting emissions by 20 per cent by 2020.

"Regulating vehicle fuel efficiency is an important element of Canada's environmental agenda aimed at protecting the health of Canadians and the environment," Cannon said in a release. "Our government intends to work towards establishing an environmentally ambitious North American regulatory standard for cars and light trucks."

The memorandum of understanding essentially promises that both governments will share information about fuel efficiency, and meet regularly to discuss new technologies, possible emission targets, and their potential economic impact on the auto industry, a key sector of the U.S. and Canadian industrial economy.

"Increasing fuel economy standards through sound science is the most effective way to reduce fuel consumption, preserve vehicle safety and support the development of the kind of technology needed to make our automobiles as efficient as possible," said Peters. "Today's announcement puts both our countries on a track to developing the kind of standards we need to secure our energy independence while protecting the economy, the environment and vehicle safety."

Canada and the United States harmonized most of their vehicle-emissions standards for air pollutants in 1988 and fully harmonized their systems in 1997.

But there is no similar regime for gasoline consumption.

While the Conservative government has announced plans to regulate gasoline consumption from cars -- a leading cause of greenhouse-gas emissions -- no such rules currently exist in Canada.

Cannon was in Arizona meeting with Peters and their Mexican counterpart, Luis Tellez Kuenzler.