Getting the PCs to survive as a minor party is not difficult, they just don't merge. Probably eventually they fill the niche now occupied by the Greens. Its getting them back as one of the two major parties that is difficult.
One problem with this is that IOTL you pretty much got the best PC leader possible post 1993 with Charest, and the worst Reform (or Canadian Alliance) leader possible post Manning with Day, so not much can be done there.
So here are three possibilities:
1. Post 2000, the PCs come up with a really popular leader, who proposes the same merger as occured IOTL. It happens, but with the difference that the PC leader becomes the first leader of the new Conservative Party of Canada.
2. The factional infighting within the Liberal Party is much worse than IOTL. One scenario is that the Chretien faction fights back harder and more effectively, I have no idea how, and not only force Martin out of the government, but block him from succeeding Chretien. Its the Martin supporters who wind up getting purged. This means the Liberals do worse in the polls, so there is less pressure to "unite the right". A number of leading Liberal politicians, maybe including Martin himself, defect to the Progressive Conservatives. This changes the Canadian political landscape, in that the Progressive Conservatives are now the obvious party of the Canadian establishment.
The left-Liberals are still in government, with an election not up before 2005, but they get pummeled by the media, which gives lots of really favorable coverage to the Progressive Conservatives. Reform or the Canadian Coverage can't buy media coverage and sink out of sight east of Winnipeg. The New Democrats get the same media coverage they always get, they do improve in the polls but not as much as IOTL. So in 2005 the Progressive Conservatives are the main alternative to an unpopular Liberal government. The Liberal government still gets hit with the sponsorship scandal, but many of their losses in Quebec go to the PCs instead of the Bloc.
This will lead to a situation where a dominant slightly right of center party faces off between two marginalized left wing parties, and two regional parties (Reform has effectively become a regional party). Logically, the rump Liberals and the NDP should then merge, but that is more difficult since the rump Liberals still have the Liberal brand, which is less tarnished than the Progressive Conservative brand had become in 1993 (though maybe it is, then you see the Liberals going the way of the PCs!).
3. Shift the 1997 IOTL vote percentages around slightly, so the PC come back against Charest goes even better. Something like Liberal 34% PC 22% Reform 17% NDP 13% Bloc 9%. I've not changed any of the OTL percentages by more than 4%. I haven't worked out what this means in seats, but most likely it pushes the Liberals into minority government status, dependent on the NDP, while the PCs have a valid claim to be the real opposition, even if they finish behind reform in terms of seats. Then Martin's plotting and the Liberal factional war breaks out earlier than in my # 2 scenario, with the PCs much better positioned.