The bill was passed on Thursday morning at the National Assembly by a vote of 85-28.
The law will force municipal workers and retirees to contribute more to their pensions to offset a $4-billion pension fund deficit.
Workers and municipalities will now contribute equally to the pension fund. Currently, some municipalities contribute 60 or 70 per cent.
Liberals battling $5.8B deficit
Liberal Premier Philippe Couillard defended the reforms during question period in the National Assembly.
"In Quebec, we don’t spend more than what we have," he said.
"The reality of catching up — there are millions of dollars to get back. We’re doing it with courage, we’re doing what was supposed to be done before. And why are we doing it? We’re doing it for today’s Quebecers and the next generations to whom we want to pass on a Quebec in good financial health," Couillard said.
Members of the opposition parties groaned when Couillard said the move was to overcome a $5.8-billion deficit.
Stéphane Bédard, the head of the Parti Québécois, said the Liberal government deliberately chose austerity when its budget was introduced.
He said belt-tightening measures would ultimately lead to poor economic performance in the province.
The proposed changes were introduced June 12.
2 amendments to bill
Municipal Affairs Minister Pierre Moreau's reforms passed with just two amendments to the bill.
One was to take some of the burden off retirees when it comes to paying off the deficit.
The second gives municipal workers' unions and the province more flexibility in contract negotiations.
The union coalition representing 65,000 white-collar and blue-collar workers, as well as firefighters, police officers and public transit employees, will respond to the bill's passage at a news conference at 2 p.m.