The Senate passed the Conservative government's contentious budget on Friday despite fierce opposition from Liberal senators from Atlantic Canada and Saskatchewan.

Bill C-52, the Budget Implementation Act, passed 45-21 in the Liberal-dominated Senate with six abstentions. Conservative Senator Ethel Cochrane from Newfoundland and Labrador was among those who abstained.

Veteran Nova Scotia MP Bill Casey was kicked out of the Conservative caucus earlier this month after he voted against the budget in the House of Commons.
(CBC)

The bill went to Gov. Gen. Michaëlle Jean and was given royal assent about two hours after the vote.

The budget drew fire from premiers and many MPs in Atlantic Canada and Saskatchewan for its measures to change the formula by which federal equalization payments to the provinces are calculated.

The opponents said it violated the Atlantic accords, signed in 2005 under then Liberal Prime Minister Paul Martin, that protect Nova Scotia's and Newfoundland and Labrador's offshore oil and gas revenues from federal clawbacks.

The contracts specify no changes can be made without both parties' consent.

"We were taken to the cleaners," George Baker, a Liberal senator from Newfoundland and Labrador, said Friday. 

"This is an illegal act of Parliament that's been passed. It's clear on its face. There's no question about this at all."

Veteran Nova Scotia MP Bill Casey was kicked out of the Tory caucus after he voted against a budget implementation bill in the House of Commons.

The votes against the budget came despite Liberal Leader Stéphane Dion's instruction to Liberal members in the unelected upper chamber not to defeat or try to change a budget adopted by the elected House of Commons.

"I guess (senators) got talked to by their bosses … So that's a pretty difficult thing to fight against," Baker said.

The budget offers the signatories of the Atlantic accords — Nova Scotia and Newfoundland and Labrador — two options:

• The old equalization formula, along with the benefits from the Atlantic accords, which allowed the provinces to profit from their offshore oil and gas resources without fear of losing equalization money.
• A new, enriched equalization formula that includes a cap on the amount of equalization payments if the province's offshore oil and gas revenues reach a certain level.

Newfoundland and Labrador Premier Danny Williams, who led the charge against the budget, said he would actively campaign against Prime Minister Stephen Harper's Conservatives in the next election over what he called a broken promise on the issue.

Both the Newfoundland and Nova Scotia government have indicated they are considering a lawsuit against the federal government, while Saskatchewan has announced that it will launch a constitutional challenge in the fall.

With files from the Canadian Press