Previously: Joe Clark's Triumphant Return.
As Prime Minister Jean Chretien entered his seventh year as Prime Minister, there was a sense that something was wrong with the Liberal Party. The media were well aware of Paul Martin's leadership aspirations, and had pegged the finance minister as Chretien's heir apparent. But while on the surface things were congenial between these two forces within the Liberal Party, there were rumours that Martin's supporters were getting more active, angling to push Chretien out, and Chretien's supporters didn't like that one bit. Rumour had it that in response to the whisper campaign, Chretien had stubbornly decided to stay in office, and fight the next election.
At first the election looked like a sure bet. After Preston Manning had backed away from suggestions that the Reform and Progressive Conservative parties be merged to unite the right, commentators (many of them writing for the National Post) wrung their hands at the prospect of vote splitting. The returning PC leader Joe Clark promised to keep the PCs in the race in a number of ridings, allowing the Liberals to come up the middle, especially in rural Ontario.
But the Liberals weren't facing the same Reform Party that they'd faced in 1997. With three years of service as Official Opposition under their belt, Manning was leading a disciplined team. Leadership challengers as Stephen Harper and Stockwell Day had stayed away, and the party was focused and well funded, ready to fight the 2000 election. More importantly, Manning's personal numbers were stronger, much stronger. His slow and steady leadership style had given him a reputation as a man with integrity. His appearances on the Royal Canadian Air Farce and This Hour Has 22 Minutes had shown him to be a congenial individual with a decent sense of humour. In the battleground ridings of rural Ontario, Manning's image was moderating.
When Chretien called an early election, clearly to catch the opposition off guard, it solidified the voting public's image of the leader as a cynical opportunist, and to the Liberals' surprise, their attempt to fearmonger Ontario against voting Reform started to fail. The Liberals remained ahead in Atlantic Canada and in urban Ontario, but elsewhere, the Reform Party's numbers were dangerous close.
On election day, Preston Manning's breakthrough in Ontario proved to be modest: 35 seats, but it was enough to deny Jean Chretien his third straight majority. When the smoke cleared, Chretien's Liberals barely hung on to power with just 137 seats to the Reform Party's 101. The Bloc Quebecois had been humbled with 38 seats, while the NDP and the Progressive Conservatives took 13 and 12 respectively.
It was a nastily hung parliament, with the Progressive Conservatives and the New Democrats sharing the balance of power. Chretien tried to govern, cutting deals on an issue by issue basis with the two smallest parties, but the situation was not stable. Worse, the tensions between the Chretien and Martin wings of the party which had been simmering below the surface broke out into the open. Chretien looked like a lame duck, and his government didn't last more than nine months. With all this pressure against the Liberal brand, Manning was well placed to grab even more seats in the 2001 election, winning a plurality of 135 seats, and governing on an issue-by-issue basis with support from Clark's Tories and the remnants of the Bloc Quebecois. The feared social conservative swing didn't occur, as the Reform Party remained committed to democratic reform, and some of its urban MPs started to champion socially progressive policies on behalf of their constituents. Miraculously, the gun registry survived, though it was run on a much tighter fiscal leash.
Sitting on the opposition benches, Chretien resigned as Liberal leader in 2002 and the party proceeded to tear itself apart in the leadership campaign that followed. Manning's Reform Party won a majority mandate in 2003 and he remained Prime Minister until he stepped down as Reform Party leader in 2007.