The federal Progressive Conservative Party led by Joe Clark in the late fall of 1998 rejected the initiative to "unite the right.

"[5] After the Alliance led by Stockwell Day was defeated and a third consecutive Liberal majority government was won in the 2000 federal election, talks reopened and in December 2003, the Canadian Alliance and the Progressive Conservative parties finally voted to merge into the Conservative Party of Canada.

The opposition died down after Manning won a leadership review with 74.6 per cent support at the January 2000 UA convention.

One day later, the party changed its official name to the "Canadian Reform Conservative Alliance".

Subsequently, at the new party's first leadership convention, Manning was defeated by Stockwell Day, treasurer (finance minister) of Alberta.

Nonetheless, the party went into the election with great hopes, campaigning on tax cuts, an end to the federal gun registration program, and their vision of "family values".

At one point, the Alliance was at 30.5 per cent in the polls; some thought they could win the election, or at least knock the Liberals down to a minority government.

The Liberals increased their large majority mostly at the expense of the NDP, and the Tories under Joe Clark lost many seats and remained in fifth place, but Clark was elected in Calgary Centre in the middle of Alliance country, so the overall political landscape was not significantly changed.

In the spring of 2001, eleven MPs who either voluntarily resigned or were expelled from the party formed the "Independent Alliance Caucus".

Day offered the dissidents an amnesty at the end of the summer, but seven of them, including Grey and Strahl, turned it down and formed their own parliamentary grouping, the Democratic Representative Caucus.

However, some grassroots Alliance supporters who had adhered to the old populist ideas of the Reform Party feared that the merger would signal a return to what they saw as indifference to Western Canadian interests.