More than one million barrels of oil a day are exported from Canada's oilsands. The U.S. government has expressed concerns about waste created in the production of that oil. (CBC)

Four former prime ministers are calling on the federal government to include a "green stimulus" in Tuesday's budget in an attempt to stimulate Canada's flagging economy.

"Green stimulus creates jobs and will jump-start Canada's role in the new global economy," said a Wednesday statement signed by former prime ministers Kim Campbell, Joe Clark, Paul Martin and John Turner.

"Green stimulus will provide long-term growth in the emerging green economy through low-cost loans and spending which dramatically accelerate production of renewable energy and deploy stimulus into transit, buildings, green grid and other low-carbon infrastructure," the statement said. It did not suggest how much the government should invest.

The statement was drafted by a coalition of environmental, labour and forestry groups, which on Tuesday released a proposal calling for the budget to include an investment of more than $41 billion over five years to "green the economy."

The coalition, under the banner PowerUP Canada, has said it has included ideas from groups like the Pembina Institute and the David Suzuki Foundation in formulating its policies.

"Our hope is that our assessment will be taken seriously by [Finance Minister Jim] Flaherty's office," said Tzeporah Berman, executive director of PowerUP. Flaherty's budget is expected to include billions of dollars of new spending and tax cuts to stimulate the economy.

Plan combines green loans, spending

In its plan, PowerUP calls on the government to issue $18.7 billion in low- or zero-interest loans over five years in order to stimulate investment in renewable energy production, energy efficiency technology and retrofitting homes and commercial buildings.

"If there's incentive to manufacture things like wind turbines and solar panels, that could really support the manufacturing industry in a difficult time," said Ken Delaney, assistant to the national director of the United Steelworkers of Canada.

The plan proposes $22.7 billion in direct spending over five years, with the majority of that money devoted to public transit. It would allocate $7.6 billion to improving existing public transit infrastructure, while $9.8 billion would be committed to expanding transit infrastructure. The rest of the funding would go toward improved energy infrastructure and building retrofits.

"It's a perfect time to step up to make those commitments [to infrastructure]," Delaney said, adding that infrastructure spending has long been neglected in Canada.

The plan says these would be partially funded by green bonds, government-backed financial instruments directed toward investment in renewable energy. Revenues from cap-and trade programs could also help pay for the plan.

When asked why the group proposed to use a cap-and-trade system to help fund the plan, as opposed to a carbon tax as suggested by former Liberal leader Stéphane Dion, Berman said: "Because that's what this government has proposed."

"We need to focus on where there's consensus and where we can move quickly," adding that while the carbon tax can be implemented quicker, both systems address the same issue, which is putting a price on carbon.

Harmonizing with Obama could affect tar sands

Newly inaugurated U.S. President Barack Obama has said he would like to invest in green jobs and energy as part of a plan to wean the United States off its dependence on oil from the Middle East and South America. PowerUP says its plan would have the government marching in lockstep with the Obama administration's energy and environmental policies.

'Canada's status as the world's most reliable supplier of energy becomes not just an economic opportunity for us but also an obligation to others, perhaps the single best way that we can contribute much-needed stability in an uncertain world.'—Jim Prentice, environment minister

Canada's ambassador to the U.S., Michael Wilson, said Monday one of the federal government's biggest challenges with the Obama administration is Canada's reputation as a purveyor of dirty oil.

Environment Minister Jim Prentice, speaking Tuesday in Toronto, said the Canadian government will push for a greater role in the U.S. energy market. He also defended Alberta's oilsands production as "a reality" that is not going away, and said the U.S. will find that oil from that source is important to its future.

"Canada not only can, I say we should play a larger role in the North American energy security solution because when you consider the implications of oil scarcity and the situations by comparison in Russia, Venezuela or the troubled Middle East, Canada's status as the world's most reliable supplier of energy becomes not just an economic opportunity for us but also an obligation to others, perhaps the single best way that we can contribute much-needed stability in an uncertain world," Prentice said.

But Berman says the federal government would be wise to consider slowing production.

"Prentice's focus on ensuring special consideration for oilsands is completely inconsistent with Obama's position," said Berman. "We need to slow down oilsands production and use it to transition towards renewable energy. We're not saying 'shut the oilsands down.'"

Canada is the largest foreign supplier of oil to the U.S., exporting more than one million barrels per day, about half of which comes from the oilsands. Environmental groups have long criticized the oilsands, pointing to the large amounts energy required to extract bitumen from the sands and the waste created by the process.

PowerUP says it represents 850,000 Canadians. It includes groups like the Forest Products Association of Canada and Environmental Defence.