A controversial bill that would have freed construction firm EllisDon from a strict 1950s labour agreement was been voted down by the Ontario legislature after the majority of the governing Liberals teamed up with the New Democrats to kill it.

All but two of the Liberals present – Vaughan MPP Steven Del Duca and Etobicoke Centre's Donna Cansfield – voted against the measure after Question Period Tuesday morning. It died by a margin of 33 to 60.

Many Liberals, including Premier Kathleen Wynne, originally supported the private members bill, moved by Progressive Conservative MPP Monte McNaughton. It would have nullified a 1958 deal that required EllisDon to use only unionized labour.

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But the New Democrats cried foul, claiming that the bill had been "tailor-made" to help out a generous donor. In 2012, EllisDon, related companies and its CEO gave a combined total of $125,960 to the Liberals. In 2013, so far, they have donated $41,500 to the party. The PCs took in $32,400 last year and $14,815 in 2013 from EllisDon and its subsidiaries. EllisDon gave the NDP $1,930 in 2012.

Earlier this month, a divisional court ruled against the labour agreement. Two unions involved indicated they will appeal the ruling, but Ms. Wynne changed her position on EllisDon, arguing that, with the court's decision, the law is no longer needed.

The Premier was absent from the legislature for Tuesday's vote, but most of her caucus followed her change of heart: a large majority of Liberal MPPs turned up to oppose the bill.

The Tories accused the Liberals of changing their tune to please organized labour, which also provides donations and help at election time. They argued the 1958 agreement puts EllisDon at a competitive disadvantage against foreign companies.

"Premier Wynne flipped and flopped," Mr. McNaughton told reporters shortly after the bill was voted down. "First of all, Kathleen Wynne supported the bill. Two weeks later, she was against it. This is weak leadership, it's pathetic leadership. Ontario job creators deserve a hell of a lot better than this."

Labour Minister Yasir Naqvi, however, said the Premier did not tell her caucus to vote against the bill, nor did the Liberals manoeuvre to ensure most of their MPPs were present to kill it.

"The Premier wanted to make sure that this was an open vote and she made sure that her caucus knew it was an open vote, and they were free to vote in the manner in which they want," he said.

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NDP Leader Andrea Horwath, meanwhile, cheered the result, saying it was wrong for governments to step in to quash labour agreements.

"I'm proud that, from Day 1, the NDP saw this bill for what it was, which was no good for Ontario and inappropriate to be brought forward on the part of one company," she said. "We're glad that it died today on the floor of the legislature."