Prime Minister Stephen Harper, far right, looks on as Finance Minister Jim Flaherty tables the federal budget in the House of Commons on Parliament Hill in Ottawa on Tuesday. (Tom Hanson/Canadian Press)

The Conservative government said Tuesday it plans to introduce legislation this year that would lead to the creation of a national securities regulator.

Finance Minister Jim Flaherty called the country's 13 distinct securities regulators its "one glaring weakness."

The move comes just weeks after an expert panel headed by Tom Hockin recommended the formation of a single national body to oversee financial market regulation in the country.

The federal government said it would form an office charged with bringing forward a transition plan within one year.

The call for a single Canadian securities regulator has been opposed by some provinces, including Alberta and Quebec.

"We will respect constitutional jurisdiction, and participation in the Canadian Securities Regulator will be voluntary," Flaherty said in his budget speech tabled Tuesday.

"For those provinces and territories and companies which choose to participate, it will sharpen our competitive edge," he said.

However, some capital experts noted that the government still had not provided sufficient assistance for banks and other financial institutions to allow them to start lending again.

"It is not the thing they would focus on in a political budget. But the business community would like to see the government do something to get lending going," said Martin Kovnats, a capital markets lawyer with Toronto's Aird & Berlis LLP.

Sector support

Flaherty's budget also contained financial support for some sectors of the economy.

The forestry sector would get $170 million over the next two years, including $80 million earmarked for new technologies.

The shipbuilding sector would get a boost through the $175 million the government is spending to buy new coast guard vessels and refit aging vessels.

The government also proposes an increase to the amount of small business income that would be eligible for a reduced federal tax rate of 11 per cent. The amount would go from $400,000 to $500,000.

Catherine Swift, president of the Canadian Federation of Independent Business, said she was pleased by the move, but was concerned about the amount of spending elsewhere in the budget.

"The high levels of spending … are worrisome for taxpayers and small business owners, as it may be the beginning of a trend which could be repeated at other levels of government, reversing in two years what it took a decade to achieve," she said.

In another nod to businesses, the government said it would introduce temporary measures to allow firms to accelerate their expensing of investments in computers and manufacturing equipment.