By Lee Greenberg, Ottawa Citizen

The McGuinty Liberals lost an embarrassing vote Thursday, their first as a new minority, as opposition Conservatives and New Democrats united to pass a tax rebate on home heating bills.

The eight-per-cent cut to HST would cost government $350 million per year and would save average families about $100 annually.

Those savings will likely remain hypothetical.

Finance minister Dwight Duncan said the Liberal minority would effectively kill the legislation, by letting it languish on the order papers. As government, the Liberals have final say over which bills are called for votes and when they are called.

The HST rebate must still be called for third and final reading before it becomes law.

"We won the election, we have the most seats in the house," said Duncan. "We're the government. We're the one who calls orders on third reading. We will call the orders we think reflect the results of the election."

His colleague John Milloy, who serves as government house leader, said succinctly: "Our priorities lie elsewhere."

Conservative MPP Peter Shurman was upset with the Liberal response to the vote.

Both the Tories and NDP campaigned in favour of an HST exemption on home heating.

"A majority of Ontarians have spoken about what it is they want," he said. "And now it is incumbent on the Liberal minority government - to respond to what a majority of Ontarians have said."

The private member's bill passed by a vote of 54-50. All members of the legislature were present except for Liberal cabinet minister Deb Matthews, who was at a conference with fellow provincial health ministers in Halifax, and renegade Grit MPP Kim Craitor, who had threatened to support his opponents.

Milloy told reporters Craitor was at a funeral.