Peterson had successfully managed to govern with a minority in the Legislature by obtaining the co-operation of the Ontario New Democratic Party, led by Bob Rae, in a confidence and supply agreement.

It was through the NDP's support that Peterson was able to form a government, even though the Progressive Conservative Party had won a slightly larger number of seats in the previous election.

The PC Party, led by Larry Grossman, campaigned on a platform of tax cuts to stimulate the economy.

Its support continued to slide, as voters opted for the change that the Liberal-NDP arrangement provided, with Grossman losing his own seat.

The PCs fell to 16 seats and third place in the legislature, their worst showing in an election in half a century.