In advance of today’s federal budget, finance minister Jim Flaherty promised that there would be no big tax cuts: today he delivered on that promise, with a handful of small measures designed to ease the burdens on business.

Flaherty’s big corporate tax cuts were announced in the mini-budget he produced last fall. Today, he merely trimmed around the edges.

One notable measure in today’s budget is a salve to Canada’s troubled manufacturing industry. Already hurt by competition from low-cost countries, manufacturers have also had to grapple with high commodity prices, a strong dollar, and now, the prospect of a global economic downturn.

To ease the industry’s pain, the budget proposes a three-year extension to the accelerated capital cost allowance treatment for investments in machinery and equipment in the manufacturing and processing sector.

This sop to the manufacturing business is expected to cost about $1 billion over the life of the extension. It will include a 50% straight-line accelerated CCA treatment for assets acquired in 2009, followed by two years during which the accelerated treatment will be provided on a declining basis.

“An extension of the support for investment made until the end of 2011 will provide businesses with more time to accelerate or increase investments. This will assist the manufacturing and processing sector in restructuring to meet current economic challenges and to increase its long-term prospects, by encouraging the retooling needed to boost productivity and move to higher value-added production,” the budget says.

The budget also proposes to extend a tax credit currently enjoyed by the mining exploration industry. A 15% Mineral Exploration Tax Credit is available to individuals who invest in flow-through shares that are used to finance mining exploration. The budget proposes to extend that credit for another year, until March 31, 2009, at an estimated cost of $120 million over the next two fiscal years.

Along with proposed extensions to existing policies, the government is also planning some tweaks to the expenditure limits and eligibility requirements that apply to the scientific research and experimental development investment tax credit program. Increasing these limits will encourage small companies to grow, it says.

Additionally, the budget aims to enhance the cross-border business and investment environment by streamlining the rules that apply to non-resident investors who realize capital gains on the sale of taxable Canadian property —something it says the venture capital industry and technology industries complain about.

Finally, it is providing $75 million for the Business Development Bank of Canada to support the creation of a new venture capital fund.