No amount of spin can change the fact that the once mighty liberal party of Canada continued its post Chrétien slide into mediocrity. In the middle of a sponsorship scandal under Martin’s leadership the liberals managed to get 103 seats representing a loss of 24 % of their seats. Under Dion’s leadership the Liberals managed to get 76 seats representing a further loss 26% of their seats.
The liberals are broke and what last nights election shows more than anything else is that the liberals can not get their vote out where it matters. Canada’s electoral system rewards geographic concentration and strong organization on the ground. Dion should go because whatever his virtues he does not inspire the liberal base nor, as is now clear, provide a poll of attraction from outside the liberal base. There are only two ways forward for the liberals at this point.
1) Drop Dion for a more charismatic leader like Ignatieff and start the process of reinventing the liberal party from the grass roots up. Much like the NDP did with Layton
2) Start merger talks with the NDP and form a new party: the Progressive Party of Canada.
I suspect the first option is the most likely. The problem for the liberals is that they are broke and a leadership contest is costly. But this should not be an issue. It would not kill the liberals to have a modest leadership convention and then focus their attention on rebuilding the party at the constituency level over the next four years.
The upside to the election is that the conservatives are going to have govern through a moderate to severe recession and their fiscal room for maneuver is highly constrained. It is going to be hard to be Harper. Having just announced 225 billion in an effective subsidy to the big banks to help them compete for global business it is going to be hard to say to other sectors. Here the Conservatives are going to find themselves damned if they do and damned if they do not. Having run on the idea that government steers the economy the Conservatives are likely to get foisted on their own petard.
This is long way around of saying that the liberals have time to sort out their own house as it is highly unlikely the conservatives are going to get anyomore popular.