Cathy Bennett's victory in Wednesday night's Virginia Waters byelection is a sign of things to come for the next general election, Liberal Leader Dwight Ball says.

"Liberals are preparing for the next election, and Liberals will be ready for the next election," Ball said, after Bennett won a narrow victory in the St. John's district last held by former Tory premier Kathy Dunderdale.

"We are preparing to lead the province…and it to be a better Newfoundland and Labrador."

Bennett, a high-profile businesswoman who had challenged Ball last year for the Liberal leadership, won the byelection by just 40 votes over Progressive Conservative Danny Breen, a St. John's city councillor. New Democrat Sheilagh O'Leary, a former city councillor, placed third.

3rd byelection win

Virginia Waters marks the third straight byelection that the Liberals have won since the 2011 general election, when the party was barely able to hold on to Official Opposition status.

Lisa Dempster held on to Cartwright-L'Anse au Clair last June, while Sam Slade snatched Carbonear-Harbour Grace in November. That seat had formerly been held by another high-profile Tory, former cabinet minister Jerome Kennedy.

Wednesday's byelection brings the Liberal caucus to 12 members, double the size after the 2011 election. The Liberals' ranks in the House of Assembly have grown with the floor-crossings of former PCs Tom Osborne and Paul Lane and former New Democrats Christopher Mitchelmore and Dale Kirby.

Cathy Bennett and Dwight Ball

Cathy Bennett walks with Dwight Ball at her victory celebration Wednesday night in St. John's. (CBC)

The PCs hold 33 seats in the legislature, while the NDP caucus has three members.

Bennett's victory also marks a breakthrough for the Liberals in St. John's, which has failed repeatedly to elect a member in metro St. John's since Brian Tobin formed a majority government in 1999.

"This is the first Liberal win in St. John's in 15 years, and I think that's a substantial statement for the strength of the Liberal party and the growing strength on the Avalon Peninsula, and across the province," Bennett told the St. John's Morning Show.

"We're really looking forward to what the future holds," she said. "We want to form government, and I think that's where our efforts are going to be focused."