If the Conservatives have a monopoly on power, that's not going to be healthy for anyone. Even if you agree with Conservative policies and priorities, they need a viable opposition, or they'll get as complacent and arrogant as the Liberals did when the right was divided.
Voters are often fed up with the continuous arguing and bickering of politicians, but our political system is inherently adversarial, just like our justice system: when we conduct a trial, we expect the lawyers on both sides to make their strongest possible arguments. Politicians can be faulted for making weak or irrelevant arguments, but not for arguing in the first place--that's their job.
Given the limits of strategic voting under the first-past-the-post system, what options do the NDP and the Liberals have to prevent Conservative dominance?
1. Continue fighting a three-way battle, with the NDP on the left, the Liberals in the middle, and the Conservatives on the right.
2. Unite the left. We end up with a two-party system, with the left party's base in Quebec, and the Conservative base in Alberta and Ontario.
3. The Liberals compete with the Conservatives for the centre-right vote, particularly in Ontario.
Option 2 doesn't look that promising to me: my guess is that the Conservatives would still be able to defeat a united centre-left party.
Option 3 looks most intriguing. The Liberal pitch would be for fiscally responsible government: surpluses and debt reduction would take priority over either tax cuts or new spending. (The federal debt is projected to be $650 billion in 2015-2016, up from $480 billion in 2005-2006, and we can expect increased health-care costs for Canada's aging expectation.)
John Duffy comments that in Ontario, the Liberals appear to have lost about half of their 2004 voters, with two-thirds going to the Conservatives and one-third to the NDP.
Calgary Grit on rebuilding the Liberal Party.
Of course, "moving to the centre-right" is very crude, and easier said than done. A Conservative blogger named "hosertohoosier" has a much more subtle analysis: Historical narrative. Social classes.