Business leaders applauded the economic update unveiled by the Liberals Monday, especially measures to cut personal income tax and restore corporate tax cuts that the minority government dropped in the last federal budget in February. But labour did not join in the applause for corporate tax cuts.

"The government has responded to the calls from business to make Canada's tax policies more competitive and to make the economy a priority," said Nancy Hughes Anthony, the CEO of the Canadian Chamber of Commerce.

Hughes Anthony, who leads the largest business organization in the country, said the minority government now faces the challenge of trying to implement the changes announced in Finance Minister Ralph Goodale's speech before the House of Commons finance committee Monday.




"It is imperative that all parties recognize that action is needed now to strengthen Canada's productivity to ensure the future prosperity for all Canadians," Hughes Anthony said in a news release.

Goodale also drew praise for a plan to reinstate corporate income-tax cuts that the Liberals initially included in their last budget but then scrapped in the deal to win NDP support.

But the Canadian Labour Congress said corporate profits "are already at an all-time high" and said these profits "have not necessarily translated into more business investment and better jobs."

"How much more evidence does the government need that across-the-board corporate tax-cuts are a drag on the economy?" said CLC president Ken Georgetti.

"The economy calls for targeted tax-cuts to help hard-pressed manufacturers make badly-needed investments in workers' training, research and development, new machinery and to adjust to the higher dollar," he said.

Georgetti also wondered if any of the initiatives would become reality.

The fiscal update also included money to deal with what Goodale called Canada's problem with productivity. There's millions for research and development in the private sector and universities – money to help small business move into emerging markets, and money to educate skilled workers.

That was good news for manufacturers who face a shortage of skilled employees.

"It's been hard to get them to say the 'M word,'" said Perrin Beatty, of the Canadian Manufacturers and Exporters. "Now there's a recognition that the manufacturing sector faces serious challenges," he said.

Ellen Russell, an economist from the Canadian Centre for Policy Alternatives, dismissed the tax cuts as election campaigning and said they dwarfed the new spending.

"Tax cuts of $30 billion means a lot of public services won't be made, a lot of roads won't get paved and it's a lot of hospitals that won't be built," Russell told reporters after Goodale's update.