Canada's Senate passes 2007-08 budget bill

OTTAWA, June 22 (Reuters) - The Canadian Senate passed the government's budget implementation bill on Friday, clearing the way for a new tax on income trusts and a controversial measure defining federal transfers to provinces.

The Senate approved the bill by a vote of 45 to 21. The bill is expected to be signed into law later on Friday.

The minority Conservative government got a minor scare earlier this week that the opposition-controlled Senate might delay passage of the bill or even defeat it.

Senators from Nova Scotia and Newfoundland charged that the 2007-08 budget breaks a promise by Ottawa to grant them special treatment for their offshore oil and gas resources.

Some of those critics abstained in Friday's vote, saying they did not want to block the other measures contained in the budget.

Prime Minister Stephen Harper has countered that Ottawa had not broken any agreements.

The budget bill also includes a tax on income trusts, which angered some investors who were taken off guard by the announcement made on Oct. 31 by Finance Minister Jim Flaherty.

The Liberals failed in a last-ditch attempt to delay implementation of the tax for 10 years, instead of four years as outlined in the bill.