The Canadian province of Ontario will join a regional carbon credit trading pact developed by U.S. governors that would give companies financial incentives to reduce greenhouse gas emissions.

The province's premier, Dalton McGuinty, said Friday that Ontario will become part of the Western Climate Initiative, which includes seven U.S. states and British Columbia, Manitoba, Quebec.

A key to the initiative is a cap-and-trade system that allows polluters to buy credits from greener companies. The system is scheduled to begin by 2010.

The initiative was established last year and sets a group-wide greenhouse gas emissions target of 15 percent below 2005 levels by 2020. Participating states and provinces plan to enact laws making the program compulsory.