Manufacturing, forestry say budget does little for them

The beleaguered forestry and manufacturing sectorssay they didn't get much they could take to the bank or their workers in Finance Minister Jim Flaherty's third budget.

The most noteworthy item for manufacturers was a one-year extension in thetax break forinvestments in new equipment and machinery followed by two more years of smaller tax breaks. Extending this measure will give manufacturers about$1 billion in extra tax relief over three years.

"It is helping Canadian manufacturers make the investments
needed to build modern facilities here at home and still take on the world," Flaherty said in his budget speech.

But the measure fell short of what the manufacturing industry was looking for.

"Disadvantage Canada, that's what this budget represents for Canada's manufacturing and exporting sectors," said Jay Myers, president of Canadian Manufacturers and Exporters.

"We were very specific in what the nation's most innovative industry needed and we received recycled ideas and pocket change at a critical time when we needed tangible solutions," he said.

About 300,000 factory jobs have disappeared in the last few years as the Canadian dollar made it increasingly difficult for exporters to compete.

The biggest union in the struggling auto sector was not pleased.

"The announcement of $250 million over five years for the auto industry is a baby step in the right direction, but much more is needed," said Buzz Hargrove, president of the Canadian Auto Workers.

"This money should be the first part of a much bigger long-term automotive strategy, not a one-time gesture to rally voters," Hargrove said.

The money is for the development of more fuel-efficient vehicles.

Forestry sector looking for more

The forestry sector, which has seen tens of thousands of layoffs amid falling lumber prices andthe high loonie, also said the government needed to do more.

"In a nutshell, the action being taken in the budget by the government is not proportional to what the industry has been doing and what the situation demands," said Avrim Lazar, president of the Forest Products Association of Canada.

The Communication, Energy and Paperworkers Union of Canada the country's largest forestry union saidFlaherty"did not even acknowledge the crisis in the forest industry" and said his budget "left rural Canada out in the cold."

The railway industry, however, liked the budget's move to boost the capital cost allowance rate on rail equipment from 15 per cent to 30 per cent.

"The government's change in its tax policy will encourage the acquisition of more fuel-efficient locomotives," said Cliff Mackay, president of the Railway Association of Canada.

Corporate Canada got more than $14 billion in tax reductions over five years in last October's economic statement most of that will come through a steady reduction in the corporate income tax rate.