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THE LIBERAL PARTY has governed Canada for most of the country's existence. All of its leaders since the start of the 20th century have served as prime minister. The party has achieved this extraordinary level of success by following a formula honed by longtime leader (1919–48) W.L. Mackenzie King to stay as close to the political center as possible, allowing the party to appeal to either the Left or the Right by altering its position only slightly. The party has alternated between Anglophone (English-speaking) and Francophone (French-speaking) leaders since the 19th century, partly by coincidence and partly by design. King, an Anglophone, succeeded Sir Wilfrid Laurier, a Francophone, and King was determined that a Francophone succeed him. This led to the election of his Francophone successor, Louis St. Laurent. The alternation continued with the elections to the Liberal leadership of Lester B. “Mike” Pearson, Pierre Trudeau, John N. Turner, Jean Chrétien, and Paul Martin. Liberal leadership contests are generational events, coming in 1919, 1948, 1957, 1968, 1984, 1990, and 2003. The other Canadian parties tend to have leadership contests more frequently.

The Liberal Party is flanked on the left by the New Democratic Party (NDP), formerly the Co-Operative Commonwealth Federation (CCF). The existence of a left-wing, social democratic party in Canada would theoretically be a bad thing for the Liberal Party, according to conventional political science, but the presence of a competitor on the left actually helps the Liberal Party maintain a firm grip on the center. With much of the political left busy in the NDP, the left wing of the Liberal Party has always been smaller than the left wings of the U.S. Democratic Party or the British Labour Party, for example. There have also usually been two parties to the right of the Liberal Party. The Conservative Party (known as the Progressive Conservative Party from 1942 to 2003) is Canada's oldest political party, although the names of the two parties are misnomers since the Conservative Party has also been a centrist party for most of its history.

The differences between the Liberal Party and the Conservative Party have usually been most pronounced in the ethnic, religious, and linguistic composition of the parties rather than ideologically. Since the election of Laurier in 1896, the Liberal Party has been the main party for Francophones, and this was cemented by the party's opposition to conscription during World War I. (Most Canadian Francophones did not support Canada's entry into what they perceived as England's war with Germany.) Most immigrants to Canada support the Liberal Party, as do the bulk of urban Catholics, and Jewish voters are the single most Liberal voting bloc. The Conservative Party, on the other hand, has traditionally been dominant among Canadians of Anglo-Celtic extraction. Socioeconomic status plays less of a role than in the divide between the parties in the United States, for both the Liberal and Conservative parties have done well in both wealthy and poor areas.

Prime Minister Paul Martin continues the long tenure of the Liberal Party maintaining political power in Canada.

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