Updated: Thu Mar. 08 2007 5:37:42 PM

Canadian Press

TORONTO — The $586 million pledged by the federal government for climate-change initiatives in Ontario will go towards developing cleaner sources of power, not trying to clean up the province's pollution-spewing coal plants, Premier Dalton McGuinty said Thursday.

When Ottawa proffered the money Tuesday as part of a $1.5-billion package for transit improvements and environmentally-friendly energy, Prime Minister Stephen Harper billed it as a way to speed up the planned closure of the province's most notorious polluters.

In fact, that will more likely be a happy side effect of the money, which would be put to better use developing a cleaner, greener alternative to coal, McGuinty said.

"We're not going to use the half-billion dollars to deal with the coal plants specifically themselves,'' he said, adding that ending Ontario's dependence on coal remains a high priority for the governing Liberals.

"We will close the coal-fired plants as quickly as we can.''

Harper suggested Tuesday the money might go toward building an east-west transmission project that would allow Ontario to import cleaner hydroelectric power from Manitoba.

A spokesman for Energy Minister Dwight Duncan said the province plans to release a new climate change plan in the spring, and would only say that the federal money would be used to help finance a portion of that plan.

Outfitting the coal plants with scrubbers -- technology which helps to reduce the environmental impact of burning coal by lowering emissions -- doesn't make much sense when the plants are slated for closure, McGuinty said.

The chief executive of Ontario Power Generation has said it would cost $1.5 billion over four years to outfit all of Ontario's coal-fired electricity stations with scrubbers, which does not make economic sense if the plants are taken offline in 2014 as scheduled.

"That decision has not been made yet, but right now it would appear that is not the most sensible or practical thing to do,'' McGuinty said.

Conservative Leader John Tory said McGuinty's own arguments against the plants -- the Liberals promised in 2003 to close them by the end of their first mandate -- strongly support the idea of buying scrubbers.

"I think the premier might want to read some of his own words where he pointed out more than 500 people a year were (dying prematurely) because of the emissions coming from the coal plants,'' Tory said.

The plants have been blamed for hundreds of millions of dollars a year in health-care costs, he added.

Tom Adams of the energy research group Energy Probe agreed scrubbers may not be as bad an idea as the Liberals seem to think they are.

"That has been the official position of the Ontario government going back into the 1980s -- that we're about to get rid of coal so there's no point in making investments to clean the coal up,'' Adams said.

"As a consequence, we've been operating coal plants without modern pollution control equipment all this time, and we do that today.''

Adams said he's still skeptical the government will phase out coal by its latest target, given that natural gas prices are on the rise and previous targets have been missed.

McGuinty admitted it will take time to completely phase out coal, but continued to insist Ontario stands apart from other jurisdictions -- Alberta, British Columbia, the United States, India, China -- where the use of coal is increasing, not declining.

He said his consultations with economist Nicholas Stern, who wrote a landmark report on climate change for the British government, led him to conclude Ontario is the only jurisdiction in the world committed to phasing out coal-fired production.

"I asked him specifically, `Is there any other jurisdiction to your knowledge on the face of the planet where they're phasing out coal?' He said no, to his knowledge there was not. That makes us a leader,'' McGuinty said.

"Let's not take our eyes off the fact that when it comes to the world, we are the leader. We are phasing out coal-fired generation at a time when hundreds of other coal plants are going to be opened.''

New Democrat Leader Howard Hampton said it's hard for Ontario to call itself a leader when other provinces, such as Quebec and Manitoba, are already coal-free.

McGuinty has said in the past that the plants could be closed more quickly with Ottawa's help, Hampton said.

"Now he's received (almost) $600 million and gee, he's breaking his promise again,'' Hampton sneered.