When Stéphane Dion won the leadership of the party in December 2006, it was the defining moment of a party looking to reinvent itself. The membership shunned the party machine that backed Bob Rae and Michael Ignatieff. Instead, it chose another Quebec politician as its head, and also embraced an issue that Dion will be making his top priority: the environment.

Less than a year ago, when Paul Martin turned over most of his leadership duties to Bill Graham on an interim basis, he began the process of leaving what was a badly bruised and divided party. Even before the results of the Jan. 23 election were in, the sniping had begun.

Martin was blamed for running a campaign that distanced his regime from the administrations of former prime minister Jean Chrétien.

There were great expectations for Martin when he took over the party in December 2003. But after two years, he turned three successive sweeping Liberal election wins into a distant memory. The 2006 results were the worst for the party since 1988.

The party had been split along Martin and Chrétien lines almost since Chrétien became leader, just as the party had been split between supporters of Chrétien and John Turner in the 1980s, when Chrétien waged his own battle for the leadership of the party.

So in the 2006 convention in Montreal, the party signalled that old divisions were to be mended, bringing out Turner, Chrétien and Martin on stage. The contenders also sought to beat the drum of party unity. Ignatieff got the crowd shouting "tous ensemble," or "all together." In his first speech, Dion took hold of that same phrase.

Natural governing party

The Liberal party is sometimes called Canada's natural governing party. It's a title the party carried in the 20th century and the first half-decade of the 21st. Before that, the Conservatives – under Sir John A. Macdonald – held a lock on power. The party had built up a network of natural allies across the country. It helped that the opposition was not united.

The Liberal party didn't coalesce into a united force until the election of 1872, the second vote since Confederation.

The next year, John A. Macdonald was forced to resign as prime minister in the wake of the Pacific Scandal and an election was set for Jan. 22, 1874. The Liberals won a landslide and held power until September 1878, when Macdonald and his Conservatives swept back into power, largely due to voter anger over the Liberals' free-trade policies. The Conservatives would continue to shut out the Liberals until 1896.

In 1887, the Liberals chose Wilfrid Laurier as their leader. He was the first French-Canadian to lead a national party – and was seen as a clear signal that the Liberal party accepted that the French and English formed an equal partnership in the country.

The Liberals started to make steady gains across the country, despite losing the federal election in 1891. Two years later, the party held its first national policy convention, attracting 2,500 delegates.

By the time it was over, the party had committed to:

• Reconciling provincial autonomy and national unity.
• Upholding civil and religious freedom.
• Building a self-governing nation in which all the elements would be harmonized without losing their own distinctive character.

It signalled the beginning of the Liberals' domination of Canadian politics for more than a century.

In 1896, the Liberals under Laurier won a national election for the second time since Confederation. The party campaigned on a platform of provincial rights. Laurier would win the next three elections, mainly by copying Macdonald's formula for success:

• A national network of supporters.
• An expansionary role for government.
• Attempting to bridge the gap between French and English Canada.
• Pressing ahead with reform when the situation allowed.
• Rewarding loyal friends with government jobs.

The Liberals became known as a pragmatic party of the centre, shifting to the left or right as the electoral conditions warranted. They differed from the Conservatives when it came to foreign policy. Laurier created the Royal Canadian Navy, while the Conservatives preferred contributing to the British navy.

Laurier led the Liberals until his death in 1919 — a total of 31 years, half spent as prime minister. He was replaced — on an interim basis — by Daniel D. McKenzie.

McKenzie ran for the leadership in August 1919 but finished well behind William Lyon Mackenzie King, who would go on to be Canada's longest-serving prime minister. Under King, the Liberals laid the groundwork for some of the social programs that would become the party's focus in the 1960s.

The party maintained broad appeal across the country – until John Diefenbaker's Conservative sweep in 1957. It was the beginning of Liberal misfortunes in the West, as the party came to be seen as one that was obsessed with central Canadian issues, especially appeasing Quebec. Only Trudeaumania in 1968 brought the Liberals a substantial number of western seats. But by the election of 1972, Pierre Elliot Trudeau had little western appeal and the Conservatives took every Alberta riding.

The Liberals would rely on taking the bulk of the seats in Quebec and Ontario, doing well in Atlantic Canada and remaining competitive in British Columbia.

But that ended in 1984, when the Conservatives, under Brian Mulroney, swept to power. Mulroney learned well from the Liberals, building support in Central Canada, especially Quebec.

The party tends to do well when it is able to articulate a clear vision. For instance, in the 1960s, Liberals championed social programs and limiting foreign control of the economy. Liberal accomplishments from that period include medicare, the Canada Pension Plan, the Canada Assistance Plan for a national welfare policy, the guaranteed income supplement, the liberalization of divorce and the end of capital punishment. In the 1990s, the mantra was eliminating the deficit and getting the economy on a solid footing.

One of the criticisms of Martin's leadership is that no one was quite sure what the party stood for. It's something Liberals will have to deal with as they set out to rebuild once again.

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