Prime Minister Stephen Harper, right, and Foreign Affairs Minister Lawrence Cannon, centre, watch as Finance Minister Jim Flaherty delivers his budget speech in the House of Commons on Parliament Hill in Ottawa on Thursday. (Adrian Wyld/Canadian Press)

The Tories' promised corporate tax cuts escaped the scythe Thursday in the face of the $49.2-billion deficit, but there was little fresh help for companies staggered by the recession.

"We are staying on course to having the lowest corporate income tax rate in the G7 by 2012," Finance Minister Jim Flaherty said in his speech.

"Some argue that we should cancel these tax reductions. Our government will follow through on our commitment. Reducing the tax burden on businesses is a key part of Canada's advantage in the global economy."

The federal general corporate tax rate is 18 per cent and set to reach 15 per cent in 2012, down from 22.12 per cent including the corporate surtax in 2007.

Flaherty did extend a hand to the country's battered manufacturing sector, pushing ahead with a plan to eliminate tariffs on machinery and equipment as well as tariffs on production inputs that was started last year.

A first phase was implemented in the budget last year, saving companies about $88 million. The government expects to fully eliminate the remaining tariffs by 2015 in a second phase that is expected to save companies $300 million a year.

Thousands of workers have lost their jobs in the manufacturing sector in recent years — especially in southern Ontario — hammered first by a rising loonie compared with the U.S. dollar and then by the recession as its key market in the United States dried up.

"It will help our manufacturers to invest and innovate, especially small- and medium-sized manufacturers," Flaherty said. "It will help keep jobs in Canada and create new jobs for Canadians for years to come."

But Jason Safar of PricewaterhouseCoopers said the minister's decision to stick to its plan on corporate tax cuts in the face of the deficit was the most welcome.

"They are staying the course on that, which I think is huge," Safar said. "When you look at where corporate rates have come from over the past decade ... it's a big drop."

Safar said given the size of the deficit, there was a real danger the government may have delayed the cuts. "I wouldn't have been surprised if they had been pushed off," he said.

Jayson Myers, president and chief executive of Canadian Manufacturers and Exporters, said the tariff reduction will help, but more targeted measures are still needed to sustain innovation, investment and growth.

"While the savings are marginal, it is a bottom-line boost to cash flow for manufacturers at a time when it is needed the most," Myers said.

However, Canadian Auto Workers president Ken Lewenza said the budget did little to help workers.

"With hundreds of thousands of Canadians facing tremendous insecurity and hardship because of inadequate Employment Insurance and pension benefits, I expected to see tangible support from this government," Lewenza said.

"After taking more than two months to recalibrate, this budget is nothing short of pathetic."

The minister also announced the government would move to reduce red tape with a commission of parliamentarians and the private sector to review federal regulations.

"Its work will be of special benefit to small businesses, the engines of job creation in Canada," Flaherty said.

Also included in the budget was an extension of the mineral exploration tax credit for one year, for those who invest in flow-through shares.

The government also committed $7.2 million over two years to improve the fish and seafood industry's access to the international market and $75 million over three years for cattle processing plants.