My idea for the party system is that both the Coalition and the Alliance have primaries before the general election, to decide which party stands in each seat in the GE. For example, a Coalition primary would have candidates from the Federalist, Social Credit, Liberal and/or RPLL. Generally, the Federalists win most Coalition primaries and Labor win most Alliance primaries. It's still basically a two-party duopoly because the Liberal, Social Credit, RPLL and Working Families parties all have very regionalised bases.
Here's some ideas for how the party system develops from the mid 1980s:
In 1986, Prime Minister George Bush wins another majority for the Coalition. However, some conservatives are critical of Bush's perceived eastern seaboard focus, especially his Cabinet. In 1987, the leadership of the small and declining Social Credit Party (the smallest Coalition party) is won decisively by provincial MP Preston Manning. He becomes a critic of Bush's policies and Social Credit experiences a new surge in popularity, especially in the west. Later in 1987, the moderate New Labor candidate Bill J. Blythe (maybe ITTL William Blythe (Bill Clinton's father) doesn't die and moves his family up to Chicago like he planned to) wins the leadership election and orientates the Labor Party in a new direction. Initially in the 1990 election, Bush's Coalition led in the polls, but Social Credit's surge in popularity becomes more and more of a threat to Bush and the Federalists. In the primaries, Social Credit candidates win the Coalition nominations for many seats in the west. The 1990 election ultimately proves to be a large victory for Blythe's Alliance.
Following the 1990 election, Bush resigned as leader of the Federalist Party. Following his resignation, the party was split between the more moderate leadership candidate Rudy Giuliani and conservative Social Credit backed Dan Quayle. Ultimately, Giuliani narrowly won, and Quayle conceded. In his shadow cabinet, Giuliani did give some concessions to the western conservatives. Despite some Working Families Party opposition, Blythe's New Labor program received the support of most of the Alliance as well as more moderate Federalists willing to support the government on some legislation, and as Prime Minister he was reasonably popular. The 1992 vote on healthcare reform would prove to be the most partisan vote in a long time, as the Coalition was almost unanimous in opposition, Chief Whip Newt Gingrich strongly urging Coalition MPs to vote No. Even though the reform passed, it kick started a new, more confrontational style of politics. Secretary of Public Infrastructure Al Gore Jr. unveiled a large new infrastructure plan focused on increased computer and Internet connections into rural eras proved very popular, and increased government backed research into computer and Internet technology lead to an economic boom in 1993. Giuliani ultimately failed to rally conservative turnout as the Social Credit Party only grew stronger. Blythe would win another similarly large majority for the Alliance in the 1993 election.
Following the election and the failure of further moderate leadership, the Coalition was more willing to listen to Preston Manning and the Social Credit Party, who now made up a sizeable section of the Coalition caucus. Many in the Federalist Party worried the Social Credit Party could quickly become the largest party in the Coalition or even break away, splitting the right-wing vote. Manning argued the Coalition needed an outsider as a leader, and recommended the 34 year old economist and writer Stephen Harper as a possible leadership candidate. Though initially ignored by Federalist leaders, Harper gained a following among fiscal conservatives and younger party members and in a surprise victory narrowly won the leadership election. Harper set to work rejuvenating the image of the Coalition against the popular Alliance. Ironically, Harper's victory lead to a renewal of western support for the Federalists, meaning Social Credit ended up experiencing losses in the primaries. While the Alliance had initially written off Harper, they underestimated his support and so in election season they focused on Harper's inexperience in government. Alliance primaries also saw success for Working Families candidates. Despite losses to Harper's Coalition, the Alliance still managed to win a slim majority.
Whilst some in the Coalition were calling for a new leader, most recognised Stephen Harper had improved the Coalition's standing and believed he could lead them to victory in the next election. The election results left Blythe's New Labor faction in a more precarious situation. Backbench rebellions from the Working Families Party and the left of the Labor Party could lead to legislative defeats. In his third term, Blythe's administration moved slightly to the left, accommodating a stronger WFP. In 1998, allegations emerged that Prime Minister Blythe was having an affair with an intern. Initially denying this, as more evidence emerged and criticism came from both the opposition and his own party, Blythe resigned as PM, succeeded by Al Gore Jr, who was popular among the Labor grassroots. Trouble was also stirring in the Coalition camp. Previously popular Stephen Harper had come under increased criticism for mostly avoiding talk of Blythe's scandal. He also refused to address the concerns of social conservatives in the party who hoped support from some in the Labor party could lead to further restrictions on abortion. The economist Harper believed focusing on social issues was not a path to electoral victory, and many in the Coalition believed the reasons for their 1996 loss were simply that Harper wasn't personable enough to be leader and simply didn't seem to feel confident on the campaign trail. In 1999, the conservative Kit Bond launched a leadership challenge and narrowly won. The 2000 election was the closest in American history as polls went back and forth between Gore's Alliance and Bond's Coalition. The primaries were victories for both the Labor and Federalist parties on each side. The Greens also experienced a surge in support, despite Gore's well-known environmentalism. Ultimately, Bond won a very slim majority despite the Alliance winning the most votes and being very close behind in some seats (some of the recount efforts proved controversial).
Kit Bond, in his first term, had only a very slim majority to work with. Al Gore stayed as Labor leader, vowing to win the next election. During PM Bond's first term, a major terrorist attack in New York began the War on Terror. While his approval ratings were initially high thanks to a rally around the flag effect, the weakening economy and unpopular foreign policy made the 2004 election another close one. Kit Bond's Coalition lost its majority thanks to many northeastern seats going to the Progressives. Al Gore's Alliance, however, failed to capitalise on this and didn't win a plurality as minor parties had an unusually successful election.
Al Gore Jr resigned as Labor leader as Kit Bond again became Prime Minister thanks to a confidence and supply agreement with the hard right American Heritage Party led by Steve King. Bond's second term proved very difficult. The aftermath of Hurricane Katrina was a difficult affair, and the American Heritage Party voted against sending aid to Louisiana led to an ultimatum by the Coalition party Rassemblement pour la Liberté - if Bond continued the agreement with the American Heritage Party, the RPLL would leave the Coalition. Bond would ultimately choose the RPLL over American Heritage. As he found it increasingly difficult to pass legislation (the AHP didn't back a vote of no confidence as the Alliance were ahead in the polls), he resigned as Federalist leader and replaced by Boyce Rioux. Meanwhile, Al Gore was replaced as Labor leader by John Edwards.
John Edwards called a vote of no confidence in TBA's government, which the American Heritage Party ultimately backed. The AHP, blamed for the collapse of the government, lost most of their seats as the Federalists surprisingly regained a House of Commons majority. Though Edwards initially considered resigning, he was still popular with the party grassroots and so stayed on as Labor leader. Rioux's first term was initially reasonably successful, with a number of manifesto promises passed. Then, in 2008, the economy crashed, leading to a surge in support for John Edwards and the Alliance. However, Edwards' newfound popularity (some polls in late 2008 showed over 50% planned to vote for the Alliance) was short-lived. Tabloids began reporting that Edwards had an affair while his wife was suffering with cancer. It then emerged the Labor Party had attempted to cover the affair up. The Edwards scandal led to a loss of support to Labor, which didn't shift to the Coalition, but in fact stayed in the Alliance. Jack Layton had been elected leader of the Working Families Party, the junior partner in the Alliance, in 2004. He began to build up the support outside its traditional urban base and many Labor MPs disgusted as Edwards' behaviour defected to the WFP. In the 2010 primaries, the Working Families Party had the most GE candidates for the first time in the party's history.
The 2010 election was a surprise victory for the Alliance, now led by Jack Layton and the Working Families Party. In the biggest shock, the RPLL (as well as the Bloc Populaire) experienced huge losses to the WFP who had a surge in Francophone areas. Layton used the opportunity to pass left-wing legislation the WFP had been campaigning on for years. He gave the office of Deputy Prime Minister to little-known left-wing Labor backbencher Carte Goodwin. Unfortunately, Layton's time in office was brief and he passed away in 2011. Layton, popular both at home and abroad, was mourned around the world. Carte Goodwin was promoted to Prime Minister. Labor had, since the 2010 election, been leaderless as many of its top leadership had lost their primaries. Carte Goodwin ran for, and won, the Labor Party leadership election. Initially he was only in place as an acting Prime Minister until the WFP leadership election, but the Working Families Party backed him as Prime Minister. He worked on moving Labor on from the Edwards scandal, promoting backbenchers to government roles and emphasising a new start for the party. The public began to return to supporting the Labor Party, a number of WFP MPs defecting to (sometimes back to) the party. The 2013 primaries resulted in the return of the status quo with Labor as the largest Alliance party (though the WFP far bigger than they were in the 1990s and 2000s), and Goodwin's Alliance was re-elected to a comfortable majority. In 2015, the political world was shaken up when Donald Trump, previously a Federalist supporter and donor, fell out with Federalist/Coalition leader Paul Ryan and announced the formation of a new populist party. This new party threatened both the Alliance and the Coalition. Though it underperformed in the 2017 election, it resulted in the Alliance narrowly losing its majority and having to work with the Progressive and Green parties. Paul Ryan decided to stay on as leader, backed by former leader Stephen Harper and most of the Federalist establishment, but the conservative grassroots is organising against Ryan. Trump's new party has begun to orientate itself more to the right, wading into disagreements within the Coalition. Support for Goodwin and the Alliance is still reasonably high and they currently have a decent lead in opinion polls, constantly gaining against the dysfunctional Coalition. The Labor Party is working on hard upon keeping its support in the traditional heartlands of the Rust Belt.
PARTY LEADERS
Federalist
1982-1990: George Bush
1990-1993: Rudy Giuliani
1993-1999: Stephen Harper
1999-2006: Kit Bond
2006-2011: Boyce Rioux
2011-2013: TBA
2013-????: Paul Ryan
Labor
1987-1998: Bill J. Blythe
1998-2005: Al Gore Jr
2005-2007: ?
2007-2010: John Edwards
2010-2011: vacant
2011-present: Carte Goodwin