The Liberals, led by Mackenzie-King, were still in power in 1929, in fact that is what caused them to be forced out in 1930. Had Bennett had the brains or the balls to do what you say, the Liberals would have been out for a generation, (or more), but he pulled a Hoover... And Mackenzie-King got back into power in 1935.
Well yeah. But presumably Laurier in charge during WWI will butterfly things enough that someone not quite as brilliant as King in charge and the Tories have somebody with a brain. Who is an open question, we need either a Red Tory (if the Progressive Party merges/is stillborn pre Great Depression) or a smart determined conservative that needs the Progressives to form government.
However, there were no Red Tories in 1929 or 1935. They had their own party, the Progressives. It wasn't until about 1945 that the two merged to become the PCs. Blue Tories will do similar things when their backs are against the wall, but by then it is too late, as it is election time.
Yep. Again, I'm counting on butterflies to either force an earlier merger (Tories need the Progressives to form government after the Liberals fall in 1930-1?) or simply Laurier/WWI butterflies keeping on to keep Red Tories in the party.
Word. Though at the present time, the Liberals have the same issue too. In the 1920s and the 1930s there wasn't really any serious Third Party challenges for the two main parties.
Well ever since the '70s or so the Liberals have had their two faction war spill more out into the open (Turner/Trudeau, Turner/Chrétien, Chrétien/Martin, Rae/Ignatieff), but the Tories typically have at least three and sometimes four or five factions to handle.
So, yeah. Blue "Bay Street" Tories. Red "Ontario/Atlantic" Tories. Prairie Populists. Prairie Social Conservatives. Etc….
My rough timeline: Laurier wins in 1911 and keeps power through the war. No Union government.
The Conservative Party does not face the Progressive Party as the lack of the Union Government's failure to alter tariff structure doesn't hurt the Tories. Therefore the Red Tories that left OTL (not all of them did IOTL, but a bunch did) stay within the Party, along with the more populist elements.
The Conservatives gain power briefly post-war and enact Teddy Roosevelt inspired ideas on a surge of populism (let's say they build something cool: improve the Montreal-Ottawa-Toronto rail link? An expanded streetcar network in Toronto and the creation of one in Vancouver? Whatever, but something infrastructure related) but their coalition is unstable (coughQuebeccough) and under various differing pressure they collapse.
The Liberals, led by someone other than King (I dunno, suggestions?) take power in time to have several boom years and then the Great Depression.
Smart Red Tory (again, suggestions) leads the Conservative Party to victory in 1930-1 and promptly sets out building stuff to create jobs. Probably also a social welfare program to stave off socialist thoughts in the workers.
Following the lead of the last Conservative government the Smart Red Tory focuses on things that will help in the future, and not just make-work. Let's say they take a page from London and began building a subway system in Montreal and Toronto. Improved rail links (i.e. they work on faster trains by straightening track) and more of them, bridges, more roads, and—in what could be something key—quality tall buildings. If they were smart enough to build housing but make it high rise and of reasonable quality the whole sprawl problem in Canada could be damaged early. Not enough to stop it, but enough to make the major cities far denser than OTL. (Maybe too out there, I admit, but it would be nice.)
That should be enough to give the Tories a structural outside-of-Quebec advantage to be the dominant-ish party. Probably not to the Liberal extent OTL and certainly not like the LDP of Japan but more than enough to be the winner of a majority of elections.