In three federal elections, the Reform party went from being a western curiosity to Official Opposition in Parliament. More than any earlier third party from western Canada, it effected the federal party competition and influenced a major shift in the direction of public policy and the character of political debate in Canada.

The Reform party was created in 1987. Since the middle 1960s, Preston Manning had wanted to lead a party of the political right. After several years of the Mulroney Conservative government (1984-1993), which relied on a large Quebec vote for its parliamentary majority, a new space had opened up in the federal party system. Antagonism towards the Conservative government reached new heights in western Canada following the government's attempt to give Quebec "distinct society" status through constitutional reform. Many previous Conservative voters and even NDP voters switched their allegiance to the Reform party. In 1993, Reform made an unprecedented breakthrough with 52 seats, more than any western "third party" since the Progressives in 1921.

In many ways, the Reform party resembled the Social Credit party. It obtained its strongest support in Alberta, opposed an extensive and redistributive welfare state, and was disproportionately supported by older, middle class men. Like Social Credit, Reform attracted socially conservative, English-speaking voters in western Canada, who felt that Canadian society had disastrously retreated from desirable traditional Christian values. Like his father Ernest and god-father William Aberhart, Preston Manning is a lay fundamentalist Christian preacher.

Yet Reform also differed from Social Credit in important ways. Social Credit activists always distrusted economic elites, particularly bankers and other financial players. By contrast, Preston Manning and influential party supporter see the market as the only effective means of distributing social goods and making social decisions.

Reform's emphasis on the role of the market in public life followed a trail blazed by conservative American politicians and think-tanks. They wished to minimize the role of government in public life far more than has been attempted in any industrialized country since before World War II. To do this, they proposed deep tax cuts, which would deprive governments of the revenues they need to operate many social programs and public services, and allow citizens more after-tax income. In the spring of 2000, Reform changed its name to the Canadian Alliance, adding policy changes aimed at broadening its appeal in the rest of Canada. It also chose a new leader, Stockwell Day.