04/21/2015 04:12 EDT | Updated 06/21/2015 05:59 EDT

In Federal Budget, Tories Turn To Small Business, Maufacturing To Overcome Oil's Woes

OTTAWA - If Tuesday's federal budget is any indication, the Conservative government is looking to big thinkers and small business to keep the economy growing.

But in the shorter term, the government is also looking to rev up manufacturing as an antidote to grim fortunes in the oilpatch.

Exporters struggled for years with the effects of a high Canadian dollar that weakened exports and in turn gave them less money to invest in new equipment and training. Now that the tide has turned, the sector is looking to government for a leg up.

"For this government the words 'made in Canada' continue to fuel pride and inspire confidence," Finance Minister Joe Oliver said in a text of his budget speech.

"But we must give manufacturers the tools they need to create the products — and the jobs — of the future."

The budget proposes to give manufacturers an accelerated capital cost allowance for eligible machinery and equipment purchases between 2015 and 2026. That means companies can write off the cost of new tools more quickly, which gives them an incentive to make long-term investment plans.

For small businesses, the budget proposes cutting their tax rate to nine per cent from the current 11 per cent by 2019, a move the government says will cut taxes by $2.7 billion.

The government hopes businesses use these saving to create new jobs.

Though the government estimates that there are 1.2 million more people with jobs now than at the end of the recession, job prospects remain uncertain for students, older adults, low-skilled workers, First Nations and new Canadians.

The budget proposes several new measures aimed at increasing workforce participation, including a $65-million program starting next year to link businesses with schools to develop curricula to better prepare students for existing jobs.

A pilot program that allows people to work and still collect some of their unemployment insurance is being extended and one that helps internationally trained workers get recertified to meet Canadian standards is being made permanent.

Canada lags behind other major economies in terms of the money it devotes to research and development.

The automotive industry has been calling for more help in this area and the budget provides $100 million over five years to support product development and technology demonstration.

Much of the auto sector is located in vote-rich southern Ontario, where local fortunes rise and fall on the strength of the industry and the Conservatives have made concerted efforts to shore it up.

More broadly, more than $1.5 billion will be spent over the next six years on research into everything from particle physics to brain health as the government seeks to spur the education and private sectors into coming up with the next big idea.

Photo gallery Highlights From Federal Budget 2015 See Gallery