From The Canadian Encyclopedia:
A coalition government includes members of different political parties and normally appears during crises such as war or political breakdown. The fluidity of party lines, the predominance of patronage, and the novelty of responsible government led to several experimental coalition arrangements in New Brunswick, Nova Scotia and Canada in the 1840s and 1850s. The best known were in 1854 and 1864 (the GREAT COALITION) in the Province of Canada. The former, which united moderate Reformers and Conservatives, was the base for the post-Confederation CONSERVATIVE PARTY. The latter joined CLEAR GRIT Liberals, Conservatives and PARTI BLEU to bring about CONFEDERATION, although it had been dissolved by the 1872 election.
The strengthening of party affiliation and the development of the apparatus of a party system since Confederation have made coalitions more difficult to negotiate. At the national level, the only coalition has been Sir Robert BORDEN'S 1917 UNION GOVERNMENT. Faced with strong opposition to conscription and with other major difficulties during WWI, Borden sought to broaden his wartime political base by bringing several conscriptionist Liberals and other public figures into his government. In the December 1917 general election, this government won a decisive victory over Sir Wilfrid Laurier's Liberals. The Union coalition did not long survive its triumph: the end of the war brought many Liberals back to their old affiliation, while other Unionists supported the new PROGRESSIVE PARTY.
With Borden's resignation in 1920, even the pretense of coalition disappeared. The Union government illustrated the dangers of coalition: after 1917, French Canadians associated coalitions with conscription. Indeed, during WWII, proposals for coalitions or a "National Government" came from those who also called for a stronger war effort and conscription. Since WWII there have been few proposals for federal coalition governments.
At the provincial level coalitions have occurred in western Canada. Manitoba Liberals and Progressives combined in 1931, and in 1940 all the province's parties joined a nonpartisan administration formed to meet wartime demands. In BC a wartime coalition between the Liberals and Conservatives held off the challenge of the CO-OPERATIVE COMMONWEALTH FEDERATION. The coalition probably benefited the CCF; it certainly damaged the Liberals and Conservatives, soon supplanted by SOCIAL CREDIT. No coalition has been as successful as the "Great Coalition." Politicians have become so wary of the long-term results of coalitions that they are now most reluctant to introduce them.