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Premier Rachel Notley’s government used its majority in the legislature Tuesday to pass legislation that includes a carbon tax and completes the first stage of Alberta’s landmark strategy to combat climate change.

The legislation gives legal teeth to the multibillion-dollar tax that is to take effect Jan. 1 and will raise the price of heating bills and gasoline as an incentive to go green.

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It also lowers the small-business tax rate to two per cent from three and establishes an agency to fund energy savings programs.

The final tally was 42-39.

After the results were announced, Notley shook hands with government house leader Brian Mason and exchanged a thumbs-up with Environment Minister Shannon Phillips.

“I’m extremely proud of this piece of legislation and extremely proud of this government’s climate leadership plan,” Notley told the house just prior to the bill’s passage.

“Action by this government with respect to climate change is one that is long, long, long overdue in this province.”