OTTAWA The Liberal government was forced into a significant climbdown on Wednesday morning over its COVID-19 emergency legislation, after being accused of a power grab that would equip the finance minister with exceptional authorities to tax, spend and loan money without limit.

Parliament passed an updated version of Bill C-13 in the early morning following a full day of negotiations between parties. The NDP and Conservatives had been highly opposed to certain sections of the initial legislation, which would have given Finance Minister Bill Morneau at least 19 months of extraordinary legislative powers rarely seen in Canadian political history.

Much of the initial proposals remain in place. But opposition parties managed to dramatically pare back some of the more sweeping aspects of the bill, trimming the window of time in which Morneau can exercise his new powers, and sharpening the details around the type of spending Ottawa can bring forward over the next six months.

Opposition members were caught off guard by a number of measures introduced in the legislation, particularly a surprise clause that gave Morneau the ability to raise or lower taxes without the approval of Parliament. That clause was outright scrapped before Wednesdays vote.

Conservative MP Scott Reid, who was the first to raise opposition to the bill, said he had become increasingly alarmed by the haste with which the emergency legislation had been tabled, saying the Liberal measures would effectively strip away parliamentary oversight for the next two years.

The initial draft of the bill, which first leaked to media Monday night, would have given Morneau until the end of December 2021 to use his expanded powers, a total of 21 months. The more recent version trims that window down to six months, until the end of September 2020.

Morneau on Wednesday did not respond directly to reporters questions about why the 21-month timeline was necessary.

This would give the minister of finance the power to do anything, literally

The bill also proposed to give Ottawa far-reaching authority to make payments to any entity during any times of significant and systemic economic and financial distress. Opposition members and many observers said the text was excessively broad, breaking with past parliamentary conventions and allowing Ottawa to buy equity, offer lines of credit, or bail out companies at any time for any purpose.

This would give the minister of finance the power to do anything, literally, Scott told the National Post.

The updated legislation changed the text from any entity to provincial and territorial governments, vastly restricting what bodies those federal funds can flow into. The new text allows payments to entities only after the government has consulted with provinces and territories. Ottawa has already pledged $500 million to lower orders of government in additional healthcare funding.

Opposition members also denounced the fact that section four of the initial draft gave the minister of health the ability to spend all money required to do anything if the minister determines that there is a public health event of national concern.

Critics again balked at the sweeping language of the proposed text. An updated version provides the same powers to the minister, but more specifically stipulates that the spending would need to come amid the spread of an infectious disease, such as the coronavirus disease 2019 (COVID-19).

Also on Wednesday, policymakers passed a motion that will compel Morneau to appear before the House finance committee every two weeks to update the public on where and how much money has been spent.

The legislation was introduced in order to trigger $27 billion in aid spending first announced by Morneau last week, as part of an effort to help families and businesses cover their cost of living through the COVID-19 pandemic. That figure could will soar much higher with the passage of Bill C-13, which sets no upper limit on how much Ottawa can spend to combat the economic fallout from the virus.

Morneau on Wednesday had already upped his initial cost estimate for the measures to $52 billion, as employment insurance claims soar.

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Here's what changed in the COVID-19 emergency bill and why opposition called it a Liberal 'power grab' - National Post