NIAGARA-ON-THE-LAKE, Ont. - Neither the federal government nor the Bank of Canada are willing to take steps to slow the climb of the Canadian dollar, Premier Dalton McGuinty said Wednesday as he threw in the towel in his battle with Ottawa and pledged instead to defend Ontario against external economic pressures.

In a discussion at the annual Ontario Economic Summit in this picturesque southern Ontario tourist town, McGuinty said he's done trying to convince the federal government the Canadian dollar must be kept in check to save valuable manufacturing and forestry jobs.

"I get the sense after meeting with the prime minister and from hearing the musings of those representing the Bank of Canada that they are not inclined to tinker with the dollar,'' McGuinty said.

"(That's why) I don't intend to devote a great deal of energy and resources to raging against the high dollar.''

McGuinty said he would try to lower the dollar's impact on manufacturers and exporters if he could, but he's not in a position to do so.

So instead, McGuinty said he's "urgently'' responding to pressures on the economy with a $165-million venture capital fund to invest in cutting-edge companies.

The government has earmarked $90 million, along with another $75 million from partner investors, to fund inventors that are currently working on ideas in basements, garages, and hospital and university labs.

"We've got all kinds of people coming up with great ideas,'' McGuinty said.

"There are some wonderful opportunities, for example, when it comes to dealing with a global challenge, climate change, in terms of innovation and how we can both create jobs and solve this problem at the same time.''

McGuinty said the plan will follow up on the success of a $1.15-billion fund that has supported job creation and signalled to the world that Ontario is seeking investment.

"The purpose of that was to send up a red flare so that all potential investors looking at North America will see that in Ontario, they've come to the table with a fund that has the letter `B' in it, not the letter `M' -- it's got the `B' in it for a billion dollars.''

Business leaders at the conference said they also want the province to cut corporate taxes, but McGuinty said they're already low enough in Ontario and pointed out the federal rates are higher.

That wasn't good news to Len Crispino, president of the Ontario Chamber of Commerce, who did acknowledge there isn't one single measure that will save companies from a high dollar, interest rates or energy prices.

"I think we've got to take a holistic approach to this,'' he said, adding that companies needed help before the dollar skyrocketed, and changes to the provincial tax structure shouldn't be tied specifically to the swing in the currency.

"People talk about the issue of the dollar and from our standpoint, whatever cuts or whatever tax issues are considered should be taken on their merits, as opposed to just dealing with it because of the dollar.''

The opposition parties said the Ontario government's reaction to the slumping economy is hardly "urgent'' and isn't nearly enough to save companies that could go out of business without help.

They pointed to Wednesday's comments by Bank of Canada senior deputy governor Paul Jenkins, who warned the dramatic rise in the Canadian dollar is putting Canada's economic growth in peril.

"There just isn't the sense of urgency with respect to the Ontario economy on the part of the Ontario government,'' said Progressive Conservative Leader John Tory, who also addressed the conference.

"They're issuing press releases, they're pointing fingers, but I think there's things they can do -- reducing taxes, getting on with infrastructure, reducing the regulatory burden; those are things they can do and should be doing.''