(Note: if you’re looking for information about what types of government might emerge following a hung (minority) parliament election result, you may be interested in this post, this post and this post. Also, there was no Liberal-NDP coalition in 1985 – it was a Liberal minority government with supply-confidence support from the NDP, as will be explained below.)
Canadian Prime Minister, Conservative Stephen Harper, has repeatedly stated that only the party that wins the most seats has the right to form a government (in the event of a hung parliament), and that a coalition government which does not include the party that won the most seats (for example, that might include the 2nd and 3rd place parties), would not be legitimate. He has even stated that if his party were to finish second in a general election, but the party that does win the most seats is defeated on a confidence vote soon after the election, he would refuse a request by the Governor General to try to form a government because that too would be somehow illegitimate and contrary to the wishes of voters.
This is simply not how our system works. Canadians do not elect governments, they elect a parliament. The government is formed by any party or group of parties which can command the confidence of the House. It doesn’t matter if these parties finished first in terms of number of seats or second and third – what matters is that they can demonstrate that they have the confidence of the House to govern. There has already been one very good example of a second-place party forming the government following an election, in the province of Ontario in 1985.*
The 2 May 1985 general election in Ontario resulted in a hung parliament, with the incumbent Progressive Conservatives winning 52 seats, the Liberals 48 and the NDP 21 (total seats 125, 63 seats needed for a majority in the Legislature at that time). A minority PC government was formed, but the Liberals and NDP were already in discussion to bring down the government. After several weeks of negotiations, the two parties reached an agreement known as “The Accord“. The two party leaders, David Peterson for the Liberals and Bob Rae for the NDP, signed a deal that would see a number of NDP priorities put into law in exchange for an NDP motion of non-confidence in Miller’s government, and the NDP’s support of the Liberals. The NDP agreed to support a Liberal minority government for two years, and the Liberals agreed to not call an election during that same time.
As per this agreement, the NDP introduced a motion of no confidence in the Miller government, which carried (18 June 1985). As a result of the Liberal-NDP accord, Lieutenant-Governor John Black Aird asked Peterson to form a government. Miller formally resigned as Premier on June 26, 1985 and a minority Liberal government supported by the NDP governed the province for two years, as agreed to by the parties. It is very important to understand that this arrangement was not a coalition government. A coalition government requires that all parties forming the coalition be represented in government, i.e., hold various cabinet positions. In this instance, the NDP was not part of the government; they did not have any of their MPPs appointed to cabinet. It was a Liberal minority government with the NDP providing confidence and supply support for a two-year period.
It should also be noted that in many European countries which use some form of proportional representation to elect their legislative bodies, coalition governments are often formed that do not include the party that might have won the most seats over all (but not a majority). The current government of Israel is a coalition government that does not include the party which finished “first” in terms of number of seats.
*I am referring to a party which finishes second in terms of number of seats won. There have been instances of parties finishing second in terms of number of votes, but still winning the most seats – yet another distortion of First-Past-the-Post.